Zimbabwe just might be soon easing up on its hardline stance on cryptocurrencies. Journalists observe a potential change in attitude in Mthuli Ncube, Zimbabwe’s finance minister, who reportedly said it was impossible to ignore cryptocurrencies forever.
As noted by the Herald, Ncube believes cryptocurrency would be better suited as an investment vehicle than a legal tender. This implies that the Victoria falls stock exchange might list crypto-based products in the near future.
Crypto May Finally Be Easing Up On Zimbabwe’s Hardline Stance
Zimbabwe’s Central Bank released a statement in 2017 clarifying its position on cryptocurrency use in the nation, saying that Bitcoin and other cryptocurrencies are not legal tender and should not be treated as such.
In Zimbabwe, virtual currencies are not regulated by law, according to the apex bank, which makes them vulnerable to money laundering, fraud, tax evasion, and even terror financing.
In response, the central bank instructed all banks under its jurisdiction to cease all transactions involving digital currencies, which includes holding, trading, or transacting in these currencies or providing services to entities dealing in them.
Total crypto market at $2.49 Trillion | Source: Crypto Total Market Cap from TradingView.com
Ncube’s recent comments suggest that the Zimbabwean government is shifting its attitude toward digital currencies. He seems to be advocating for his government and others to utilize blockchain technology. That is, without ceding economic control.
Commission fees of up to 20% are charged for all remittances sent by Zimbabweans abroad. Blockchain technology could reduce these fees significantly. The economy of Zimbabwe will be able to benefit from an increase of 7% in remittances.
Zimbabwe’s minister of finance stated that the government is developing a regulatory framework to enable cryptocurrency use in a controlled environment. The government already developed a regulatory framework to sandbox cryptocurrency use.
African Countries Are Embracing Crypto
Global cryptocurrency value rose by 1,200% between July 2020 and June 2021, according to Chainalysis’ Geography of Cryptocurrency report.
It is expected that such growth would lead to some important changes. One factor that could be contributing to the growth of cryptocurrencies is the devaluation of fiat currencies compared to cryptocurrencies, which have seen significant growth. This has led to citizens looking for more protection for their money.
Cryptocurrencies are also popular due to the ease of cross-border transactions. Remittances to African countries can be completed in seconds rather than days using traditional banks and at a fraction of the cost.
African governments, however, are generally not as enthusiastic about these currencies as their citizens. In some cases, they have even banned crypto transactions altogether. Nigeria, Kenya, Morocco, Algeria, and others have warned their citizens and financial institutions to cease trading and transferring digital currencies.
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