With the daily need to combat terrorism and money laundering in the nation, the government of Zimbabwe moves to broaden the extent of the current standing financial rules governing digital assets, cryptocurrencies in particular.
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The Cabinet has recommended amendments that widen the definition of the security anti-money changers Act, to include virtual assets. The changes will have effects on secondary laws, such as those that oversee Anti-money laundering (AML) and Combating Terrorism Financing (CTF).
In 2017, Zimbabwe witnessed the Wannacry ransomware attack that reportedly held computers hostage until victims paid the hackers in bitcoin. The illegal activity led to the loss of $8 billion. This case alone has the government trying to restrict access to cryptocurrency.
A Local news blog, The Sunday Mail, records that Information, Publicity and Broadcasting Services Minister, Monica Mutsvangwa, shared in a post about Cabinet briefing last week that the Money Laundering and Proceeds of Crime Act, and Securities and Exchanges Act, will be amended to reflect the changes.
The changes are also designed to encourage the Securities and Exchange Commission of Zimbabwe (SECZ) to come up with regulations to supervise the Virtual Assets Service Providers (VASa Ps) on a risk-based approach.
A virtual asset pertains to any form of digital manifestation of value that is qualified for a digital exchange, transferrable or used for objectives of serving as a payment tool, this includes cryptocurrencies. Nevertheless, this does not include the digital representation of currencies.
Speaking about the law amendment, Prosper Mwedzi, a Zimbabwean digital assets consultant shared his opinion saying:
“The amendment looks like a step in the right direction for the country as it is the first time that digital assets are expressly mentioned under Zimbabwean law. When effective, it will establish SEC Zimbabwe as the official regulatory body to have oversight of crypto for AML purposes and will create a path for policy development in this space. The main concern is how long will thiholdersss take”
– Digital Assets Consultant, Zimbabwe
Zimbabwe reportedly makes up the highest number of bitcoin hodlers in Africa. According to a news release by LocalBitcoins, the majority of Zimbabweans are using bitcoin for investment and trading amidst the tough financial situation in the country.