The subject of cryptocurrencies continues to be topical the world over. Especially in Zimbabwe, the issue has been at the fore lately. The fact that I have written a lot about cryptocurrencies lately speaks to that. The relationship between cryptocurrency adoption and the Zimbabwean government has been mainly rocky. You will remember when the RBZ unveiled the Fintech Regulatory Sandbox early this year. It clearly stated then that products or services such as cryptocurrency, digital currency, and central bank digital currency had been categorically stated as non-eligible. However, it seems of late that the government is slowly beginning to seriously entertain the idea of adopting these new-age innovations.
Computer Society of Zimbabwe (CSZ) ICT Summit
Running Theme: Digital Innovations For Post Pandemic Recovery
This summit was recently held in the resort town of Victoria Falls. Permanent Secretary and Head of e-government Technology Unit in the Office of the President and Cabinet Brigadier General (Retired) Charles Wekwete was a key dignitary present. He highlighted that government was currently in consultative engagements with the private sector.
He did point out that government, like many others, is still hesitant when it comes to cryptocurrencies. He said, for the most part, the government is still not yet fully versed with the dynamics. Thus they would want to initially wrap their head around the field before embracing it.
He also indicated some of the government’s concerns namely, cross border movement of funds, money laundering, externalization of funds, and illicit flow of funds to fund illicit issues.
All in all, he cited that government is not yet at a place where they can announce definitive cryptocurrency policies. Consultative processes are still being carried out but the government is willing to explore the possibility of adopting digital currencies.
Important Things To Consider
Consultative Processes Must Be Comprehensive And Inclusive
I think there is nothing wrong with doing consultations as is being done. At the end of the day, the inputs into the process from the various stakeholders should be fed into ultimate decision making. The other important aspect is for the process to be comprehensive and inclusive. It would not be enough to say consultations are being done yet other key players are being left out. For instance, many people already own, buy, sell, and trade cryptocurrencies in Zimbabwe. These people constitute a key source of invaluable insights into the world of cryptocurrencies. Then of course there are Zimbabwean cryptocurrency startups to consider. One of the most notable ones is Zimbocash (whose cryptocurrency is called Zash). This is a Zimbabwean cryptocurrency that was officially listed on an international exchange called Bithumb Global earlier this year. I believe they should be a key inclusion in the consultative processes.
Case Studies Should Be Considered
Government can also draw insights from case studies around the world. In Africa, they can look at Nigeria which recently introduced a central bank digital currency (CBDC). After all, Nigeria is at the apex of cryptocurrency trading in Africa. There is a wealth of knowledge to be learnt from the Nigerian example. The other interesting case study in El Salvador recently made Bitcoin an official legal tender. Already there are noteworthy outcomes that have been borne out of that move by El Salvador. For instance, the number of cryptocurrency wallets has now surpassed the number of traditional bank accounts. Even more interesting is that most people’s buying power has appreciated by about 30 per cent. These are all case studies that the Zimbabwean government can consider in learning more.
It promises to be interesting to see what comes next in Zimbabwe regarding cryptocurrencies. Generally, cryptocurrencies can longer be ignored since they are here to stay. For as long as other nations are adopting them then as Zimbabwe we cannot afford to trail behind. Zimbocash (Zash) looks to be a formidable Zimbabwean cryptocurrency. Since it was listed this year, its all-time high to date is US$1.37. That simply means at one point 1 Zash reached a value of US$1.37. It is important to consider that Bitcoin was started in 2009 and it was around 2011 when it reached a value of around US$1. As of today (12 years later) it is now steadily approaching a value of US$70000. Suffice to say there are some exciting upsides to be enjoyed from adopting cryptocurrency as legal tender in Zimbabwe.
After yesterday’s post-cabinet briefing the government seems to have made an about-turn. Stating that they have no intentions to adopt a new currency and that the Zimbabwean dollar remains the marquee currency in the country. Is this trying to prop up the already battered Zimbabwean dollar or the denial of a rumour before the confirmation comes?