Zambia is making a U-turn on cryptocurrency regulation in 2023

Zambia will complete simulations of cryptocurrency usage by the end of June to help it shape new cryptocurrency regulations aimed at striking a balance between innovation and consumer protection.

Finance Minister Felix Motati said that a strong digital infrastructure is critical to the adoption of digital currencies in the region.

Zambia takes a U-turn after crypto warning in 2018

He added that the usability tests will help develop crypto regulation in the South African country.

The announcement comes nearly two months after the Bank of Zambia and the Securities and Exchange Commission announced that they would test technology needed to regulate cryptocurrencies. This announcement coincided with a visit to the country by Ethereum co-founder Vitalik Buterin to discuss the potential of Ethereum.

Zambia previously discouraged citizens from Cryptocurrency He warned that the financial system did not provide them with any legal protection.

However, it is also I confess that blockchain can “prove positively disruptive, transformative, and efficiency-enhancing.” Blockchain is a decentralized ledger that uses a consensus mechanism to finalize the correct balances of cryptocurrency users.

Cardano, co-founded by Ethereum co-founder Charles Hoskinson, is also helping African cryptocurrency adoption through digital identities and financial inclusion.

Cardano builder, Input Output Global, has partnered with the Ethiopian government to offer decentralized digital student identities. It also co-financed a Kenyan startup, Pezesha, to enable responsible lending to MSMEs.

The Lightning Bitcoin Network is driving crypto adoption in Africa

Several other initiatives argue that the utility of Bitcoin as a tool to carry money can move money across Africa more cheaply than traditional remittances.

Recently, Block Payments CEO Jack Dorsey and his associates spoke at the Africa Bitcoin Conference in Accra, Ghana. They have argued that Bitcoin offers an alternative financial system for countries whose currencies are facing devaluation and have complex trade relationships. Citizens in these countries are often unbanked, allowing Bitcoin to provide a financial lifeline to those who need it most without an intermediary.

Legal status of cryptocurrency in Africa. source International Monetary Fund

“I don’t care if the price goes down or up because I can still use Bitcoin as a way to move money around the world instantly.” argue Mike Brock from Block last month.

Bitcoin payments company Strike uses the Lightning layer of Bitcoin to move funds between the United States, Ghana, Kenya, and Nigeria. Lightning allows payments between nodes via a payment channel with a lower transaction cost than the main Bitcoin network. Strike converts dollars into Bitcoin and sends them to an African partner to convert them into local money using Lightning.

Yellow Card, a company that received funding from Dorsey’s Block, allows customers to receive cryptocurrency in 16 African currencies for a network fee of between five cents and $1.

For a recent Be (In) Crypto Bitcoin (BTC) analysis, click here.


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