Rumours that Zimbabwe was mulling over the adoption of Bitcoin as a legal tender alongside the Zimbabwean Dollar appear to be untrue.
Charles Wekwete, head of e-Government technology in the southern African nation previously confirmed there were several discussions regarding Bitcoin legalisation within the private sector.
“Governments are still trying to understand and properly trying to create policies on how to deal with cryptocurrency,” he said.
“In our case, initially we were trying to understand their implication because they are a fundamental departure from previously known financial instruments and there are a lot of fears about cross border movement of funds, money laundering, externalisation of funds and illicit flow of funds to fund illicit issues.”
After his announcement, publicity and broadcasting companies Minister Monica Mutsvangwa, stressed Zimbabwe had no intention to follow the El Salvador example.
The federal government made it clear that the Zimbabwe greenback will stay the only real authorised tender within the nation.
“Authorities wish to guarantee the nation that it isn’t contemplating introducing one other foreign money within the economic system as reported in some sections of the media,” she said.
“Our native foreign money is the Zimbabwe greenback, and never cryptocurrency.
“Like most nations on the planet, the authorities of Zimbabwe, by means of its Monetary Know-how Group, is finding out Central Banking Digital Foreign money versus cryptocurrencies, Bitcoins or any type of derivatives.”
Watching the saga unfold, founder & CEO of Quantum Economics Mati Greenspan tweeted:
Looks like the IMF gets to keep their mule. Sorry ppl your monetary freedom has been postponed. https://t.co/jhp10XI5og
— Mati (@MatiGreenspan) November 9, 2021
Problems with money laundering and illicit flow of funds
Still, Zimbabwe’s finance minister Mthuli Ncube recently called cryptocurrency development “unstoppable”, and its adoption in Africa has since jumped 1,200% in the last year.
It is the third-fastest growing crypto economy in the world, as people favour digital coins because they help them avoid bank and exchange restrictions.
Zimbabwe ranked 61st for crypto adoption, the Chainalysis 2021 report found.
Money laundering and illicit flow of funds are among the factors that have spurred Zimbabwean regulators, along with many others around the world, to think carefully about opening up to crypto.
Wekwete also said authorities around the world were still trying to develop policies for crypto assets. But the implications of adopting digital currency are still not clear.
This is in part because crypto assets are a “fundamental departure from previously known financial instruments”, he noted.
He added there were also a lot of concerns around the cross-border movement of funds.
“So the government has put in place mechanism to try and gather views from various sectors of society in order to eventually formulate policies,” he said.
“Sooner or later, (the) government will make statements, but we have not gotten there yet. The consultative process is already underway.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.