Zambia is set to complete real-life cryptocurrency usage simulations by the end of June, according to Felix Mutati, the country’s science and technology minister. Mutati stated that his country is seeking a balance between innovation and consumer protection. However, he also argued that Zambia must focus on building a digital infrastructure, including digital identities, before introducing cryptocurrencies. Mutati’s latest remarks came nearly two months after he first revealed that Zambia was testing technology to regulate cryptocurrencies.
In February, Mutati also lauded cryptocurrency, which he describes as a technology that encapsulates a future that Zambia desires. Nevertheless, despite being the embodiment of a future that Zambia craves, crypto still poses risks to users. According to Mutati, the Zambian government’s task now is to put in place regulations that have the right balance. “Our main goal in the area of cryptocurrency is to strike a balance between innovation in terms of digital payments … [and] citizens’ safety, particularly given that cryptocurrency is very volatile. The central bank is simulating that to see what would happen in the real world. The results will assist us [in] the formulation of the regulation,” Mutati reportedly said.
Mutati also addressed lingering concerns about the size of Chinese loans which topped $5.7 billion in 2022. When asked about the rate of investment inflows into Zambia, Mutati, a former finance minister, claimed that more investors are showing an increased appetite to invest in the Southern African nation.
Zambia is not the only African country looking to explore the potential of cryptocurrencies. Earlier this year, Nigeria’s central bank announced that it was working on a digital currency, while Kenya and Ghana are also exploring the possibility of launching their own cryptocurrencies. The uptake of cryptocurrencies in Africa has been driven by the need for cheaper and faster ways to send and receive money, especially for those who are unbanked or underbanked.
However, there are also concerns about the risks associated with cryptocurrencies, including their volatility and the potential for fraud and scams. Governments around the world are grappling with how to regulate cryptocurrencies in a way that balances innovation with protecting consumers.
In Zambia, the focus is on building a digital infrastructure that can support the safe and secure use of cryptocurrencies. The completion of real-life cryptocurrency usage simulations by the end of June will be an important step in this process, providing valuable insights into how cryptocurrencies can be used in the real world and what regulatory measures are needed to ensure their safe and secure use.
