In a significant policy shift, Zimbabwe is working on its first-ever cryptocurrency regulation, marking a pivotal turnaround from its 2018 stance when the Reserve Bank of Zimbabwe (RBZ) banned banks from processing cryptocurrency transactions. This move is seen as a step towards legitimizing an industry that has long operated in the shadows, driven largely by the country’s economic instability.
A New Direction for Zimbabwe’s Crypto Industry
The government-appointed National Risk Assessment Coordination Committee (NRACC) initiated consultations with crypto stakeholders in May 2024 to develop a regulatory framework for cryptocurrencies. These consultations ended in June 2024, representing the most significant effort to date to create a structured environment for crypto trading. The consultations have paved the way for a potential licensing system for cryptocurrency exchanges in Zimbabwe, offering legitimacy to businesses operating in the sector.
While the NRACC has not responded to requests for comments, insiders suggest that the government has encouraged the formation of crypto lobby groups to facilitate direct discussions with regulators. This will allow stakeholders to shape the future of cryptocurrency in Zimbabwe by working closely with the government to establish a robust regulatory framework.
Crypto’s Role in Zimbabwe’s Economic Challenges
Zimbabwe’s economic struggles—marked by hyperinflation and currency volatility—have led many citizens to explore alternatives to the traditional banking system. Cryptocurrencies, with their decentralized nature, have provided a haven for Zimbabweans seeking financial stability. Platforms like Binance, Coinbase, and local crypto exchange Golix have grown popular as citizens turned to digital currencies to safeguard their wealth.
However, the absence of a legal framework has had severe consequences. The 2018 ban on crypto transactions forced much of the industry underground, leading to a rise in speculative trading and the emergence of crypto-related pyramid schemes. In May 2024, Dr. Solomon Guramatunhu, a prominent Zimbabwean ophthalmologist, lost over $100,000 in a crypto scam, underscoring the risks of operating in an unregulated market.
Despite these challenges, crypto stakeholders believe that formal regulation, particularly the licensing of crypto asset service providers (CASPs), is essential to restoring public trust in digital currencies. “The Golix fiasco and other scams painted crypto in a bad light because the victims never got back their coins or any justice,” said one stakeholder. Introducing a regulated environment would help to prevent such incidents in the future.
Benefits of Cryptocurrency Regulation in Zimbabwe
One of the major benefits of introducing a regulatory framework is that it would allow businesses and traders to open legitimate bank accounts, a crucial step toward full integration into Zimbabwe’s financial ecosystem. Currently, most crypto-related businesses in Zimbabwe rely on alternative payment providers like PayPal and Payoneer, which limits their ability to operate fully.
“If you are a business and cannot even open a bank account, you might as well not exist,” said the founder of a Telegram-based crypto trading platform.
For consumers, the regulation would offer greater protection against fraud by enabling them to engage with verified crypto exchanges and middlemen. This would also encourage competition in the peer-to-peer transaction space, currently dominated by mobile money services, physical cash, and bank transfers.
“Crypto will allow more competition in the peer-to-peer transaction space dominated by mobile money, physical cash transactions, and bank transfers,” noted Valentine Muhampa, a market research analyst.