Zim moves to regulate cryptocurrencies

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ZIMBABWE’S capital markets regulator says it has plans to formulate a regulatory framework for crypto currencies in the country.
This comes as governments and regulators across the world are struggling to define and implement definitive rules for the rapidly emerging asset class. The South African Reserve Bank last month published a document that offers recommendations for policy proposals to industry participants and gives an overview of the perceived risks and benefits associated with crypto-assets.
Kundai Msemburi, Securities and Exchange Commission of Zimbabwe (SecZim)’s head of corporate finance and market development, said the country was keeping tabs on international developments to come up with apt regulations.
“After receiving a number of enquiries from people who want to setup virtual currency exchanges online, we are now looking at what kind of regulatory framework we would have to put in place for the protection of the end investor,” he said.
The latest pronouncements show that the regulator, which has previously maintained that it does not recognise virtual currencies as “securities”, is warming up to the asset digital asset class after its rise in prominence.
“Now that virtual currencies are becoming topical across the globe, we believe that we must not be left behind. We believe that these could also be an essential tool to allow us to improve the rate of financial inclusion,” Msemburi told stakeholders attending a Zimbabwe Financial Inclusion Forum in Harare on Tuesday.
Still, SECZIM’s stance on virtual currencies would have to be informed by the broader discussion on the matter.
In May last year, the central bank ordered local crypto-currency exchanges to cease operations just after directing banks to deny them service. The major exchange, Golix, was granted a suspension of the ban on its operations by the High Court but the directive to banks is still in place pending further court proceedings.
Market experts say as long as this case remains unresolved, it is difficult for there to be any mainstream transactions in virtual currencies.
The securities legislation would also need some tweaking before we see SecZim presiding over virtual currencies.