The appointment of a new finance minister for Zimbabwe may also mark the beginning of a new era as the minister said cryptocurrency may help solve Zimbabwe’s cash shortage problem, a view that is contrary to what the government had believed.
The newly appointed minister Mthuli Ncube mentioned this only a fortnight after his appointment. The minister made his stand clear on the cyptocurrency controversy, saying it is not completely right to just turn the cryptocurrency idea away without giving it some consideration.
The Zimbabwean government had earlier placed a ban on financial institutions in the country saying no institution must process transactions involving cryptocurrency for traders or investors, adding that cryptos are associated with money laundering and many other illegal activities. In a circular containing instructions to financial institutions at the time, the Reserve Bank of Zimbabwe wrote:
“Further, cryptocurrencies can be used to facilitate tax evasion as well as externalization of funds in violation of a country’s laws,”
Sighting an example with Switzerland, the minister urged the Zimbabwean government to emulate the progress of cryptocurrency in the country which has made the lives of its citizens easier by allowing them to pay for services using cryptos.
“One can pay for travel using bitcoin in Switzerland. So, if these countries can see value in this and where it’s headed, we should also pay attention,” Ncube said. “We have innovative youngsters so the idea shouldn’t be to stop it and say don’t do this, but rather the regulators should invest in catching up with them and find ways to understand it, then you regulate it because you now understand it.”
Meanwhile, Zimbabwe’s strict restrictions on cryptos has forced some crypto exchanges in the country to move their businesses to other parts of Africa such as Kenya, South Africa and Uganda although the ban was later lifted by a high court in the country.
Ncube however, seems determined to persuade the RBZ to create a cryptocurrency division to help the government with research to aid implementation of cryptocurrency use in the country.
Speaking about regulation of digital assets, the minister said the technology must be researched first and understood and then proper regulatory laws can be put in place for the industry but the government must not fight it out rightly like it has done for the last two years.
It is safe to say that regulations restricting withdrawal limits for customers of financial institutions has contributed directly to the cash shortage in the country since citizens would rather keep their money at home than save with financial institutions as a result of the regulation.