Blockchain Progress News & Updates

Zambia follows Zimbabwe. Cryptocurrencies are illegal

Zimbabwe made the first step in #Africa and not Zambia is following. Zambia’s #central bank has said that #cryptocurrencies like bitcoin aren’t legal #tender in the country.

The Bank of Zambia (#BoZ), responsible for creating and implementing #monetary policies for the world’s 105th largest economy, explained their #stance against the use of cryptocurrencies in contrast to the growing public #interests in the field.

The #central bank admitted that it was receiving a lot of inquiries related to# Bitcoin’s legal status in #Zambia, and they had to “safeguard the interests of members of the #public and to maintain the integrity of the #financial system” with its official stance on the #digital currency, according to a local news report.

Constitutional #Barriers

BoZ cited #references from their financial constitutions, naming #Section30 as the main barrier that keeps Bitcoin and similar digital #assets from having a legal tender status. Also, the #bank agreed that they had no constitutional power to disfigure or ban the local crypto market under the existing #legal framework. Excerpts:

“Firstly, #Section30 of the Bank of Zambia Act vests the right to issue #notes and coins exclusively in the #BoZ. To date, #BoZ has not issued any form of #cryptocurrency. Cryptocurrencies are not #legal #tender in the Republic of #Zambia; Secondly, BoZ does not #oversee, supervise nor regulate the #cryptocurrency landscape. Consequently, any and all #activities related to the buying, trading or usage of cryptocurrencies are performed at owner’s #risk.”

Adding further, #BoZ issued a #public-interest warning identical to those released by its international peers in the past. The bank said that the #investors should be aware of the #risks associated with the use of cryptocurrencies. It added money #laundering, consumer protection (related to hacking and #fraud), and #terrorism financing to its statement, reminding that they will not be able to offer any legal recourse to #crypto users if they get subjected to any of such online #crimes.

Regulation in #Cards

The #constitution of Zambia does not define Bitcoin, which is why it has received a #flack from the country’s central bank. There is, however, a possibility of #lawmakers taking an active approach to regulating it under a modified provision. #BoJ confirmed that it would be actively looking into the #cryptocurrencies to come up with a law that “should not constrain but enable #innovation.”

As of now, the #Zambian crypto #community does not constitute any substantial trading activity to the #global crypto volume. The #country does not have an active local #exchange, and the local crypto traders mostly rely on either foreign crypto exchanges or#peer-to-peer desks to conduct their transactions. It might be due to the lack of crypto #education in a country where only 11.6 percent of people have an #internet connection, according to a #World Bank report.

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