Zimbabwe Proposes Regulating Crypto Industry Amid Economic Challenges
Summary:
Zimbabwe's government is formulating regulations for the nation's cryptocurrency industry, inviting feedback from service providers worldwide. A committee has been established to collect insights by June 26. This initiative aims to understand Zimbabwe's digital assets space and evaluate potential risks, especially in terms of illegal activities. The government plans to build a regulatory structure that promotes innovation while ensuring the financial system's security. Meanwhile, as the country grapples with financial woes, it continues to explore the potentials of crypto, including its own gold-backed digital currency, despite warnings from the International Monetary Fund.
Currently, Zimbabwe's government is working on formulating the rules that will govern the operation of cryptocurrency in the country, inviting opinions and suggestions from virtual currency service providers both domestically and worldwide. As per a news release by The Zimbabwe Mail, the government has a set timeline, concluding on June 26, for remarks via a specially assigned committee to collate insights from cryptocurrency enterprises operating in the nation. The goal is to establish a legal framework to control digital currencies within Zimbabwe.
Nick Mangwana, the Secretary for Information and Publicity, highlighted the purpose of the initiative, saying it's designed to deeply understand the virtual assets environment in Zimbabwe. Specifically, the exercise is meant to identify potential risks associated with cryptocurrencies, notably its misuse in the financing of illegal activities such as money laundering and terrorism, given the anonymous nature and decentralization of these digital currencies.
Mangwana emphasized the need for risk mitigation strategies considering the inherent anonymity and decentralization of digital currencies. He declared that the Zimbabwean government seeks to construct a regulatory setup unique to the specific demands and conditions of the country. The planned framework is aimed at promoting growth within the sector while maintaining the safety and integrity of Zimbabwe's financial operations.
The story goes on to recount Zimbabwe's attempt to assuage its financial struggles using cryptocurrencies. The South African country has been actively trying to remain current with the growing cryptocurrency trend, especially in nations facing financial hardships. In spite of warnings from the International Monetary Fund, Zimbabwe launched a central bank-distributed digital currency, backed by gold called Zimbabwe gold (ZiG), in May of the previous year.
The gold-backed virtual currency enjoyed considerable success, leading to the government's decision in October to accept it as a form of payment. The country has been dealing with rampant inflation and currency instability for over a decade, resulting in its switch to the U.S. dollar as its official currency in 2009. In a bid to rejuvenate the stagnant economy, the Zimbabwean dollar was reintroduced in 2019, triggering yet another cycle of extreme fluctuation. In response, the government decided to revert to the use of the U.S. dollar last year in an effort to rein in soaring inflation.
Published At
6/12/2024 1:44:32 PM
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