Zambia Is Looking Into Potential Crypto Regulation

Zambia Is Looking Into Potential Crypto Regulation

March 23, 2023

The Bank of Zambia has announced it’s considering adopting digital currency legislation so that it can test the technology behind crypto to see about its viability as a payment method.

Zambia Sees Crypto in a Whole New Light

Felix Mutati – the technology and science minister in Zambia – stated in a recent interview:

The testing of the technology on regulating cryptocurrency will be upscaled in due course as part of deliberate measures to achieve an inclusive digital economy for Zambia. Through digital payment platforms, people will become much more included in digital financial services. Hence, cryptocurrency will be a driver for financial inclusion and a changemaker for Zambia’s economy.

The news is good for several reasons, a big one being that several African nations (Zambia is no exception) are often wrought with financial and government corruption. This has made it quite difficult for everyday citizens to garner bank accounts and the other financial tools they need to potentially survive and provide their families with what they require.

However, there is another good reason in that crypto is now being considered as a payment option, which is what it was initially designed for, and it’s a powerful statement from regulators in Zambia that they see bitcoin and its digital cousins as tools for making purchases.

What many people likely forget is that while bitcoin and many of its crypto cousins have taken on either speculative or even hedge-like statuses in recent years, many of them were initially designed to serve as payment tools. They were built to push checks, credit cards, and fiat currencies to the side, but this has been a relatively slow journey given the volatility that continues to drag them down.

It is extremely hard to understand when bitcoin and its crypto family will go up or down when it comes to their prices. Many stores and companies have been reluctant to say “yes” when it comes to accepting crypto payments for this reason, and to a degree, we can’t blame them.

El Salvador was the Beginner of It All

Consider the following scenario: someone walks into a store and buys $50 worth of merchandise with bitcoin. For one reason or another, the store doesn’t trade the BTC into fiat right away and about 24 hours go by. From there, the price of BTC goes down and that $50 becomes $40. The customer gets to keep everything he or she bought, but the store has lost money in the end. Is this a fair situation? Not everyone thinks so.

Most of the time, it’s difficult to get stores and retail outlets to consider digital currency as a method of payment, much less an entire country. This trend arguably began in late 2021 when El Salvador of Central America declared bitcoin legal tender that could be used alongside USD.

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