The Zimbabwe government is making active advancements in crypto adoption with inputs from its citizens. This is part of Zimbabwe’s initiative to reform its economy according to the changing trends in the financial sector worldwide.
The government has advertised in all major national newspapers seeking inputs from national and international crypto service providers and ordinary citizens regarding the widespread adoption of digital currency.
The government has formed a committee of experts to facilitate dialogue between the ordinary citizens and the stakeholders.
The last date for submission of public opinion is June 26, 2024, so the government is acting fast towards implementing new laws for crypto adoption.
Zimbabwe’s decision to incorporate digital currency into its payment ecosystem is relevant because these reforms come as a surprise to the already economically unstable state troubled by hyperinflation and general price instability.
Last year, Zimbabwe ventured into the digital coin ecosystem by launching a gold-backed digital token, which was intended to pacify the skyrocketing inflation and price instability.
In April this year, Zimbabwe launched a new currency called Zimbabwe Gold (ZiG). The launch of this currency has significantly reduced the consumer price as it has replaced the Zimbabwean dollar in calculating the base inflation.
Summary of the Advertisement Released by the Zimbabwean Government
The advertisement, which was published in all major daily newspapers in Zimbabwe addresses all cryptocurrency service providers such as any company, partnership, trust, or business that provides blockchain, cryptocurrency, or cryptocurrency services including, but not limited to custodial and non-custodial cryptocurrency wallet hosting, cryptocurrency exchanges, cryptocurrency traders and brokers, cryptocurrency management providers, initial coin offering providers, cryptocurrency investment providers, cryptocurrency validators/miners/administrators, cryptocurrency developers and cryptocurrency payment solutions.
The purpose of this initiative, as per the advertisement, is
To determine the nature and extent of the cryptocurrency ecosystem in Zimbabwe.
To assess and determine the risks of cryptocurrencies being used for money laundering, financing terrorism, and other illegal activities.
To set up an appropriate regulatory framework for cryptocurrencies and cryptocurrency service providers.
The government has appointed a multi-stakeholder committee to help it in setting up the cryptocurrency ecosystem of Zimbabwe.
The committee is responsible for seeking the opinion of the concerned stakeholders such as all the cryptocurrency service providers, whether operating in Zimbabwe or outside Zimbabwe, who are providing services to the people of the country.
A link to a questionnaire is given in the advertisement and all the stakeholders are requested to answer the questionnaire. The last date for submitting the answers to the questionnaire is June 26, 2024.
General Trends in the Zimbabwe Economy
Cryptocurrency adoption by Zimbabwe is crucial given the country’s unique trends in its economy. The country’s economy is highly competitive in different areas such as agriculture, tourism, mining, etc.
It is set to grow if the immense potential of its human capital is exploited by private-sector investments.
There are many challenges that Zimbabwe has to overcome to achieve growth. The growth in agriculture and mining spearheaded the GDP growth of the country in 2022 to 6.5%, but the growth reduced to 5.5% in 2023.
In 2024, the real GDP growth is expected to dip further to 3.3%. The volatility of the macroeconomic measures caused by general price instability and fluctuations in the native currency’s exchange rate is challenging the growth of the economy.
Another problem of concern is the high inflation that Zimbabwe’s currency has been facing for the last few years. The inflation increased to 47.6% in February 2024.
Zimbabwe will be affected by an El-Nino-triggered drought in 2024. The drought mitigation measures may disrupt economic stability. Consequently, the fiscal deficit is set to become 2.5% of the GDP this year.
The Bottom Line
Zimbabwe’s crypto adoption comes at the right time when the economy is seeking a way out of the incumbent crises.
The government is planning to make policies in tune with the needs and requirements of its citizens. It is also a chance for the country to become part of the changing trends at the international level.
The country is swift, but cautious in implementing crypto adoption. It takes care that crypto adoption does not fuel any illicit activities harmful to the country.
