Zimbabwe U-Turns on Crypto, Looking to Stabilize Local Economy

The Reserve Bank of Zimbabwe proposed a crypto regulatory sandbox amid plans to launch a gold-backed digital currency.
The Reserve Bank of Zimbabwe, the country’s central bank, is considering a regulatory sandbox for crypto companies in an apparent change from its previous anti-cryptocurrency stance. The proposed sandbox is reportedly part of a broader agenda by authorities in Zimbabwe to revamp the nation’s financial sector, which has seen massive hyperinflation since 2007.Meanwhile, Zimbabwe’s government is also partnering with Apollo Fintech to develop a gold-backed cryptocurrency for the country. The collaboration is expected to allow Zimbabweans to have access to the Apollo wallet for digital-currency payments.Despite the government’s 2018 crypto ban, peer-to-peer trading of cryptocurrencies continues to thrive in Zimbabwe, as the country’s faltering monetary policies seemingly push investors toward digital currencies. In mid-2019, cryptomania in Zimbabwe reached such a fever pitch that false rumors about the price of Bitcoin (BTC) reaching a 600% premium began to spread.The RBZ’s plan to create a regulatory testing environment for local crypto companies also comes at a time when the government is reportedly exploring plans for a central bank digital currency.RBZ proposes regulatory sandbox for crypto businessesAs previously reported by Cointelegraph, the RBZ has reportedly proposed a regulatory sandbox for local crypto businesses. Cointelegraph has since confirmed that Josephat Mutepfa, the RBZ’s deputy director for financial markets and national payment systems, revealed the plan in a speech delivered at the Sound Prosperity Economic Forum in Bulawayo on March 13. An excerpt from Mutepfa’s address reads:“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 cryptocurrency companies as to how they are going to operate. 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.”According to Mutepfa, Zimbabwe’s central bank is keen on creating a robust vetting framework to ensure that participating crypto businesses model their operations to suit existing financial regulations in the country. As part of its initial plans for the crypto-regulatory sandbox, the RBZ is reportedly focusing on companies dealing in cryptocurrency-related trading and remittance.For Mutepfa, the proposed sandbox signals a pivot by the RBZ and the Zimbabwean government regarding its stance on the emerging digital economy, following a 2018 ban on financial institutions participating in crypto transactions.Related: Countries That First Outlawed Crypto but Then Embraced ItGiven the popularity of digital assets among the country’s younger demographic, Mutepfa opined that it was incumbent on the RBZ and the country’s government to work out methods for regulating the industry rather than focusing on prohibition. By ensuring greater government involvement in the digital sphere, he argued that issues such as access to capital can be mitigated, thus allowing small- and medium-scale cryptocurrency businesses to blossom in Zimbabwe.Commenting on the RBZ’s plans to create the regulatory sandbox, Marius Reitz, the general manager of Africa for the Luno

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