Zambia's Crypto Regulation Can Be Completed By June
Cryptocurrency regulation tests are underway in Zambia to create legislation on digital assets that regulates the actual use of crypto.
The central bank and securities regulator began the tests on the 19th of February, which strike to find a balance between innovation and security.
The balance between innovation and citizen security
The legislation is scheduled to be finalized by June. The Zambian government aims to find a balance between innovation in digital payments and citizen security, given the high volatility of cryptocurrencies and the existing risks associated with owning digital assets.
However, before cryptocurrencies can be adopted, digital ID credentials and the accompanying infrastructure for regulating digital currencies must be developed.
Zambia has joined countries in the African region that are exploring the introduction of cryptocurrencies and the development of appropriate regulation.
The aim of the tests is to help the government develop regulations for crypto assets, striking a balance between security and innovation.
The economic situation in Zambia
We should not forget the economic situation in which Zambia is now. The state became the first African country to default at the beginning of the COVID-19 pandemic in 2020.
Because of the default and problems with debt restructuring, Zambia is at great risk of losing the benefits achieved through macroeconomic reforms if debt restructuring continues to be postponed indefinitely.
Authorities said that thanks to cryptocurrency exchanges and payment platforms, people will become much more involved in digital financial services.
The plan is that cryptocurrency will become a driving force for expanding access to financial services and bringing change to the Zambian economy.
The economic situation in the African region
Many countries in the African region have recently taken steps toward adopting cryptocurrencies.
The Central African Republic made bitcoin legal tender in April 2022. The regulatory framework for the use of cryptocurrencies in the country was also adopted.
The Nigerian government plans to change its approach to crypto assets in the near future and adopt a new law that recognizes "cryptocurrency and other digital funds as capital for investment", despite the ban on digital assets adopted in 2021.
Such an approach to crypto regulation suggests that more and more African countries are becoming loyal to the use of cryptocurrencies and the opportunities that digital assets bring to make cheap payments around the world and attract investment in the development of their own economies.