Zimbabwe’s Central Bank Proposes Regulatory Sandbox For Crypto Firms

News, Regulation | March 20, 2020 By:

The Reserve Bank of Zimbabwe (RBZ), the country’s central bank, is developing a regulatory sandbox for cryptocurrency companies in the country.

Local news outlet Chronicle reported that RBZ has started drafting a policy framework to guide operations of FinTech enterprises so as to protect citizens. Josephat Mutepfa, RBZ’s deputy director for financial markets and national payment systems, reportedly said that proposed regulations would ensure that crypto companies are vetted through the regulatory sandbox so as to meet regulatory requirements.

“We have already started to come up with a FinTtech framework because in regulation everything should be well structured. The framework, which is a regulatory sandbox, will be assessing the cryptocurrency companies as to how they are going to operate,” Mutepfa said. “Once you enter the sandbox you either exist as a bonafide product to enter the market or you are guided to say that you need to partner a bank, a mobile money platform or your product needs to be licensed like a microfinance company. The sandbox will be an experimenting zone. Once the sandbox is there, there will be an application criterion, which will also act in the same capacity as the sandbox.”

According to Mutepfa, the country decided to regulate crypto because of its growing popularity with the country’s younger generations who “are facing challenges of having capital.”

“The challenge is that in the past the currency was a prerogative of central banks although it has been taken over by the digital currency who also operate within the currency of the country, which, therefore, minimizes loans coming forward,” he said. “Another challenge that needs to be dealt with by the Government is the interpretation of the monetary policy into all the official languages in order for the financial sector to blossom.”

Brian Maseva, business advisor at crypto-based trading consortium SPURT, said the central bank’s regulations will help grow the local cryptocurrency market.

“Since being operational in 2017 SPURT has grown countrywide to places such as Marondera and Harare and we have approximately 50,000 users,” Maseva said. “Meeting with the central bank will help us grow and attract the public to join the digital currency, which is fast taking over the financial sector. We are now aware that there is a policy, which elaborates more on FinTech guidelines that we need to follow.”