Cryptocurrency as a form of legal tender could be coming to the African country of Zimbabwe in the near future, with reports claiming that the country has started to look into how digital currency can be used as a legal payment service.
The claims are said to have come from a senior official, with the country said to be considering utilizing Bitcoin (BTC) as a legal payment option to help meet the growing demand that is being felt by the country’s wider population.
According to retired Brigadier Colonel Charles Wekwete, who is the permanent secretary and head of the office of the president and cabinet’s e-government technology unit, discussions were already being held with businesses in the country, further highlighting just how receptive the government is in trying to regulate the entire sector.
The reasons to try and regulate crypto in the country have been outlined
He has, though, outlined the reasons why Zimbabwe would be looking to regulate the industry as there are a number of disadvantages and drawbacks that could provide them with some problems. Amongst the reasons outlined are possible unregistered cross-border transfers, the externalization of money, money laundering and the fact that ill-gotten cash could flow into the economy which could then fund unlawful activities.
Moreover, Wekwete outlined that the move to try and develop regulations was to protect consumers, whilst also trying to improve and stabilize the country’s financial future. The southeastern African country is notoriously known to have suffered from hyperinflation to its currency, with the effects still being felt to the current day.
Therefore, it is hardly a surprise that there are so many within the country who are looking for cryptocurrency to be introduced within the region. Whilst many will have been able to make the most of digital currency when they decide to visit an online casino and play live blackjack with more and more young Zimbabweans embracing the gambling industry and warming up to iGaming activities including sports betting and casino games, many are starting to call for the digital asset to be used for other services and products available in the country. Indeed, despite the volatility levels that can be experienced, many feel that because it is separate from the fiat currency within the country (Zimbabwean dollar), thus allowing them to stop experiencing the hyperinflation issues that continue to plague the nation.
In addition to the idea that they will be able to better protect themselves from the hyperinflation issues that have plagued them with the Zimbabwean dollar, there are a number of other benefits that residents of the country have been able to benefit from. Bettors are able to retain a level of anonymity, thus allowing them to protect their winnings and avoid any tax that may be encountered when withdrawing the money into their bank account. Furthermore, it will allow them to protect their money and details from being hacked because of the blockchain security that is available, and with the current financial situation in the African country, it is something that will be extremely important to them.
Still some work to do
However, it is important to note that Zimbabwe is yet to make any major declaration regarding the potential use of crypto, with the country said to still be in the consultation stage. This is because the government has decided to get input from a number of different sectors for their views on whether the digital currency can be implemented as a form of legal tender.
Encouragingly, though, the government has accepted the digital economy framework as part of the National Development Strategy 1, which means there is a plan in place in which business and government efforts will be connected in regards to addressing the digital economy.
Zimbabwe could follow El Salvador and show Africa can lead the way for cryptocurrency
Whilst using Bitcoin as legal tender may be a little way from being considered mainstream, there are countries that have already looked at or have fully embraced crypto as a form of acceptable payment within the country. El Salvador is the most famous of them all at the moment, as they have a Bitcoin Law that allows for it to be used.
Indeed, Africa is a continent that could show the rest of the world whether cryptocurrency can successfully work as legal tender. There is already a demand for the digital asset, with figures between July 2020 and June 2021 showing that the market grew by over 1,200%, with high levels of penetration being experienced in countries such as Kenya, South Africa, Nigeria and Tanzania.
These figures make Africa the third-fastest growing crypto economy in the world, as people have started to look for alternatives and have turned to digital coins because they help them avoid bank and exchange restrictions.
