The Reserve Bank of Zimbabwe (RBZ) is reportedly developing a regulatory sandbox for cryptocurrency companies in the country. The news was reported on March 16 by local newspaper Chronicle, citing a representative from the bank speaking at a conference on March 13.
Chronicle reports that RBZ’s deputy director for financial markets and national payment systems, Josephat Mutepfa, revealed that the bank is working on a regulatory framework that would see companies involved with cryptocurrency go through a special regulatory sandbox.
The sandbox will reportedly help the bank decide if a particular company can be allowed to operate independently. Speaking at the Sound Prosperity Economic Forum in Bulawayo, Musephat said:
“Once you enter the sandbox you either exist as a bonafide product 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 decision to regulate crypto has been motivated by its growing popularity with the country’s younger generations, who Musephat says “are facing challenges of having capital.”
He admitted that digital currencies pose a regulatory challenge, as currency “was a prerogative of central banks.”
Zimbabwe’s troubled history with currencies
The African country is popularly known for its history of hyperinflation, with the Zimbabwe dollar seeing three redenominations to remove excess zeros since its introduction in 1980.
In 2009, the currency was removed as Zimbabwe officially became a country without its own fiat money, using a combination of several foreign currencies like the South African rand and U.S. dollar instead.
The lack of its own monetary policy did not ease the government’s stance toward cryptocurrency, as the RBZ issued a complete ban in 2018.
Since June 2019, Zimbabwe is once again trying to establish its own national currency. This appears not to be proceeding smoothly, as a local tourist guidance website warns that obtaining physical Zimbabwe dollars is very difficult.
The difficult situation in the country may be one of the reasons why peer-to-peer exchange of crypto is rising. Fostering adoption through concise regulations might help the country in finally solving its monetary issues.