The Reserve Bank of Zimbabwe (RBZ) is taking steps to regulate the digital currency industry in the country, making a U-turn from its hostile orders towards the sector.
Reported by local news agency Chronicle on Monday, the central bank has already started to draft a new policy framework guiding operations of financial technology (fintech) enterprises, which include crypto companies as well.
“We have already started to come up with a fintech framework because in regulation everything should be well structured. The framework, which is a regulatory sandbox, will be assessing the crypto-currency companies as to how they are going to operate,” Josephat Mutepfa, RBZ’s deputy director for financial markets and national payment systems, said.
He also assured that crypto companies would be vetted under the regulatory sandbox to meet regulatory requirements.
“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,” Mutepfa added.
“The sandbox will be an experimenting zone. Once the sandbox is there, there will be an application criterion, which will also act in the same capacity as the sandbox.”
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Regulation is the way to go, not banning
This goes against the central bank’s current stance on the cryptocurrency industry as in 2018; it banned all banks under its purview to offer services to crypto companies.
Earlier, the central bank also warned Zimbabwe citizens to trade crypto at their own risks, and there will be no legal protection in case of any fraud with crypto schemes.
Mutepfa also pointed out key challenges faced by both crypto investors and companies, despite the boom in the industry.
“The challenge is that in the past the currency was a prerogative of central banks although it has been taken over by the digital currency who also operate within the currency of the country, which, therefore, minimizes loans coming forward,” he added.
“Another challenge that needs to be dealt with by the Government is the interpretation of the monetary policy into all the official languages in order for the financial sector to blossom.”