Zambia tests technology for crypto regulation

Bank of Zambia and the country’s securities regulator are “testing technology” to enable the regulation of cryptocurrencies, said Technology and Science minister Felix Mutati on the ministry’s website. The country’s move aims to “achieve an inclusive digital economy.” 

Speaking in the city of Lusaka, Zambia’s capital, the minister claimed that “cryptocurrency is the future that the country desires to achieve”, but a policy framework is required to support this “revolutionary technology.” According to Mutati:

“[…] the testing of the technology on regulating cryptocurrency will be upscaled in due course as part of deliberate measures to achieve an inclusive digital economy for Zambia.”

The minister also stated that Zambia is endeavoring to be a technology hub in Africa through developing digital infrastructure and attracting investments in the sector. According to the minister:

“[…] through digital payment platforms, people will become much more included in digital financial services hence, cryptocurrency will be a driver for financial inclusion and a change maker for Zambia’s economy.”

Zambia’s government signed a Memorandum of Understanding (MoU) with Overstock’s blockchain land registry subsidiary in 2018. Under the agreement, Overstock’s Medici Land Governance (MLG) would work with Zambian authorities to reform land ownership, providing local rurals digital ownership certificates and access to the financial markets.

Authorities are paying close attention to cryptocurrency in other African countries. A recent report from the Central Bank of Nigeria (CBN) urges the development of a regulatory framework for stablecoins and initial coin offerings (ICOs). Nigeria is one of the world’s pioneers in central bank digital currency (CBDC) adoption.

In November 2022, the International Monetary Fund (IMF) pushed for increased regulation of Africa’s crypto markets, as the region’s crypto industry continued to grow. Among the reasons for embracing regulation, the monetary fund cited the collapse of FTX and its ripple effect in cryptocurrency prices.

Africa’s crypto market increased by more than 1,200% between July 2020 and June 2021, according to analytics firm Chainalysis, with Kenya, South Africa, Nigeria, and Tanzania leading adoption.