The government of Zimbabwe is widening the scope of existing financial rules to cover cryptocurrencies. In particular, the Cabinet has proposed amendments that widen the definition of securities in the Securities and Exchanges 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).
Local outlet, The Sunday Mail, reports that, Information, Publicity and Broadcasting Services Minister, Monica Mutsvangwa, told a post 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 reportedly designed to enable the Securities and Exchange Commission of Zimbabwe (SECZ) to come up with regulations to supervise the Virtual Assets Service Providers (VASPs) on a risk-based approach.
A virtual asset refers to any digital representation of value that can be digitally traded, transferred or used for purposes of making payment, such as cryptocurrencies. However, this does not include the digital representation of currencies.
At the center of the legal update is the need for the Zimbabwe government to combat terrorism financing and money laundering.
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.
Speaking about this law amendment, Prosper Mwedzi, a digital assets consultant based in Zimbabwe, said:
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 designate SEC Zimbabwe as the official regulatory body to have oversight of crypto for AML purposes and will pave [the] way for policy development in this space.
The main question is how long will this process take.
– Digital Assets Consultant, Zimbabwe
Zimbabwe makes up the most number of bitcoin hodlers in Africa. According to LocalBitcoins, the majority of Zimbabweans are using bitcoin for investment and trading amidst the tough economic situation in the country.
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