The Reserve Bank of Zimbabwe (RBZ) is working on a regulatory sandbox for local crypto firms. Highlighting remarks made by a bank executive at a conference conducted three days ago, local media outlet Chronicle revealed the info.
Chronicle has stated that RBZ’s deputy director for financial markets and domestic payment systems, Josephat Mutepfa, disclosed that the bank is developing a regulatory infrastructure that would facilitate firms associated with cryptocurrency related projects go through an exclusive regulatory sandbox.
The sandbox will assist the central bank to decide whether a specific firm can be permitted to function independently. While talking at the Sound Prosperity Economic Forum at Bulawayo, Musephat stated:
“Once you enter the sandbox you either exist as bonafide products to enter the market or you are guided to say that you need to partner a bank, a mobile money platform or your product needs to be licensed like a microfinance company.”
The plan to bring crypto under regulatory guideline was based on the rising popularity of virtual currencies among millennial, who Musephat believes “are facing challenges of having capital.” He acknowledged that cryptos do threaten prevailing regulations as currency “was a prerogative of central banks.”
Zimbabwe entered a period of hyperinflation in February 2007. Dollarization reversed inflation, permitting the banking system to stabilize and the economy to resume slow growth after 2009.
Dollarization also had other negative effects, including: Reduced taxation and financial transparency, as people resorted to safe keep their money out of the official banking system.
Ten years before, Zimbabwe turned out to be a country without any official fiat money as the country suspended it currency.
The country presently uses a mix of multiple foreign currencies such as the South African rand and the US dollar.
The non-availability of native monetary policy, however, did not pave way for cryptos. The country’s central bank issued a blanket ban on cryptos two years before.
Notably, the country is working towards reintroduction of a national fiat currency since June 2019.
However, the efforts continue to face severe drawbacks as domestic tourism related website has cautioned that gaining access to physical Zimbabwe dollars is an herculean task.
The complex scenario in the nation may be one of the factors encouraging p2p (peer-to-peer) exchange of cryptos.
Promoting adoption via clear rules could assist the nation in putting an end to its monetary problems.
