Zambia to Conclude Cryptocurrency Tests by June – Officials


LUSAKA, April 12 (Reuters) – Zambia is expected to wrap up its simulations of real-world cryptocurrency operations by the end of June in order to create regulations that both protect citizens and foster innovation, according to Science and Technology Minister Felix Mutati.

In addition to this, the Central African nation also needs digital infrastructures such as digital identities in place to introduce cryptos, Mutati noted during a Wednesday interview.

The CAR stirred the market last year by making bitcoin legal tender and launching its own cryptocurrency token, while other African countries took a more conservative approach and banned banks from dealing with crypto assets, like Nigeria.

“Our main goal when it comes to cryptocurrency is to strike a balance between allowing digital payments innovation and protecting our citizens, especially due to the extreme volatility of cryptocurrency,” declared Mutati.

“The central bank is running simulations to get a better understanding of what would happen in the real world. The results will be used to form the regulations.”

Digital currency prices fell sharply in 2020 with the collapse of exchange FTX and a number of other companies, though they have since recovered some of the losses.

“We’re seeing more and more investors interested in Zambia,” Mutati commented when asked whether any investments under his jurisdiction had been delayed, cancelled or suspended due to the country’s long-delayed debt restructuring.

Zambia became the first African nation to default in the COVID-19 era last year, and Treasury Secretary Mary Kapasa has warned that the country could lose the economic gains it made with its reforms if the restructuring of its $18.6 billion of external debt continues to be delayed.

China is the holder of the largest portion of Zambia’s external debt, amounting to $5.7 billion at the end of 2022, according to government data. Some Western officials have accused the country of slowing the restructuring process.

Mutati pointed out that the way Chinese loans were contracted during his time as finance minister between 2016 and 2018 depended on the project.

He noted that the state-owned power utility Zesco had approached Sinohydro, a Chinese firm, to build the Kafue Lower Gorge hydropower project, using a $1 billion loan from the Export-Import Bank of China and Industrial and Commercial Bank of China.

The Zambian government initiated the new Lusaka international airport, while Chinese investors began the Chambishi economic zone.

Reporting by Chris Mfula and Rachel Savage; Editing by Leslie Adler

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