Cryptocurrencies Are Not Legal Tender In Zambia, Says Central Bank

News, Regulation | October 15, 2018 By:

The Bank of Zambia (BoZ), the central bank of the country, has warned its citizens about the risks associated with trading and investing in cryptocurrencies.

The central bank said in a public notice that while cryptocurrencies like bitcoin have monetary characteristics, they are not legal tender in the country. Therefore, the BoZ had to “safeguard the interests of members of the public and maintain the integrity of the financial system.”

“Firstly, Section 30 of the Bank of Zambia Act vests the right to issue notes and coins exclusively in the BoZ,” the bank said. “To date, BoZ has not issued any form of cryptocurrency. “Cryptocurrencies are not legal tender in the Republic of Zambia. 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.”

The BoZ said that investors should be aware of the risks associated with the use of cryptocurrencies, including money laundering, terrorism financing and general consumer protection risks, such as fraud and hacking. The central bank reminded that they will not be able to offer any legal recourse to users due to the unregulated nature of crypto-related transactions.

Unlike neighboring Zimbabwe and Namibia, which both banned crypto-related activities, the BoZ said that it would be actively looking into the crypto market to come up with a framework that “should not constrain but enable innovation.”