Zambia's Minister of Innovation, Science, and Technology, Felix Mutati, has stated that the country needs to establish digital identities and other necessary digital infrastructures before introducing cryptocurrency. Currently, cryptocurrency regulation tests are underway in Zambia to shape crypto laws, with plans to finish by June, according to a Reuters interview with Mutati on April 12.
The purpose of these tests is to simulate the real-world use of cryptocurrencies and help the government understand the potential impact and risks associated with crypto, in order to formulate appropriate regulations. Mutati emphasized the need to strike a balance between innovation and safety, given the volatile nature of cryptocurrencies.
Mutati also highlighted the importance of implementing digital identities and other digital infrastructures before introducing cryptocurrencies. He believes that through digital payment platforms, people will have greater access to digital financial services, and cryptocurrencies could be a driver for financial inclusion and contribute to Zambia's economy.
Zambia, which was the first African country to default during the COVID-19 pandemic in 2020, has been undergoing a debt restructuring process. However, Mutati stated that despite the challenges, there is an increased appetite to invest in Zambia.
Cryptocurrency adoption has been gaining momentum in many African countries. For instance, the Central African Republic made Bitcoin a legal tender in April 2022, along with establishing a regulatory framework for cryptocurrency use. In addition, despite banning crypto activity in 2021, the Nigerian government has plans to pass a new law recognizing cryptocurrencies and other digital funds as capital for investment.
In conclusion, Zambia is conducting cryptocurrency regulation tests and prioritizing the establishment of digital identities and digital infrastructures before introducing cryptocurrencies. The country aims to strike a balance between innovation and safety and sees potential in cryptocurrencies for financial inclusion and economic growth. Other African countries have also been making moves toward crypto adoption in recent times.
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