Could Zimbabwe Also Follow El Salvador And Legalize Crypto?

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The cryptocurrency market has seen growing adoption by the mainstream in 2021, garnering significant attention from institutional firms. Now, several countries are also exploring how they can utilize cryptocurrencies. 

El Salvador has been leading the way and created history when the country passed a resolution to make Bitcoin legal tender. This created a domino effect, with other South American countries such as Panama, Argentina, and Paraguay also exploring the legalization of crypto in their domestic financial market. 

A Growing List Of Crypto Adoptors 

There is speculation that Zimbabwe could be the next country to join the list of nations that have made or are considering making cryptocurrency legal tender. Zimbabwe’s finance minister stated recently that it is impossible to ignore cryptocurrencies, with almost 30% of the country’s younger population investing in crypto and other digital assets. 

According to a report, the finance minister has hinted at offering certain concessions to cryptocurrencies to promote their use among the population. He explained that he saw cryptocurrencies as an investment asset and not as a currency, stating, 

“But our view is that we do not want it to be a currency. I want this to be an investment class. So through the Victoria Falls Stock Exchange platform, we will try to create crypto-based products there, which are ring-fenced within the offshore zone.”

Crypto Regulation In The Works 

The minister hinted that the government has already initiated the process to regulate crypto, explaining that the government has already begun a sandbox program with the Reserve Bank of Zimbabwe. 

“We have taken the first step already and created a sandbox, at the Reserve Bank of Zimbabwe (RBZ), where the idea and everything are being tested in a safe, regulated environment where it will then migrate to this safe Victoria Falls environment.”

Potential For Lower Diaspora Remittances Thanks To Blockchain 

Previously, Zimbabwe’s central bank had banned banks from processing transactions that involved cryptocurrencies such as Bitcoin, terming it the “currency of choice for money launderers and criminals.”

While there is still a ban on transactions involving cryptocurrencies in Zimbabwe, the country’s finance minister has hinted at a potential review of the policy when he tweeted about the potential of remittance fees through decentralized finance or DeFi. 

“I visited the DMCC Crypto Centre in Dubai, which is a fascinating incubation hub for cryptocurrency and payment solutions; I came across solutions that could lower charges for diaspora remittances.”

When Mthuli Ncube became the finance minister of Zimbabwe, cryptocurrency enthusiasts in the country were optimistic that he would reduce the restrictions on cryptocurrencies in the country and promote the use of digital currencies.

The country’s Chief Director of communications for the Ministry of Finance also talked about blockchain and its uses, commenting,

“With disruptive blockchain technology, the cost can come down significantly. The uses of blockchain are far wider than just crypto. We even have a sandbox group to analyze the use of blockchain tech in Zimbabwe created by the Reserve Bank.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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