Zimbabwean regulator announces fintech sandbox. Cryptocurrencies are not eligible
If you were holding out hope for cryptocurrencies to be involved in the RBZ Fintech Sandbox then as the title suggests we have some very bad news for you. According to the document published by the Reserve Bank of Zimbabwe, the following are eligible and non-eligible for the Fintech Sandbox:
- Mobile Money Services
- Retail Payments
- Peer-to-peer/Marketplace lending
- Digital KYC
- Financial advisory services
- Wealth Management Services
- Digital identification services
- Smart contracts
- Financial inclusion products
- Cybersecurity products
- Equity crowdfunding
- Regulatory technology products
- Crypto currency
- Digital currency
- Central bank digital currency
The exclusion of cryptocurrencies from the sandbox is massive especially when the rest of the world is beginning to take them as a viable asset. We have seen over the months the leaps and bounds that Bitcoin has made. It might have receded of late to trading from at over US$50k to now trading at around US$46K. But that hasn’t deterred the market from seeing its value.Traditional financial players like Wall Street and payments services like PayPal, Visa and Mastercard are all legitimising the once-fringe set of digital currencies.
For the Reserve Bank not to include cryptos shows that the mood over at the central bank has not change when it comes to digital currencies and assets.
Nigeria moved against cryptos and now they have a black market
Last month Nigeria’s Central Bank issued a directive that called a cease and desist to all financial institutions from dealing with cryptocurrency companies and exchanges. This move was to stop the adoption of cryptocurrencies like Bitcoin after the Nigerian authorities made it difficult for the #EndSars protests to receive funding through traditional channels and currencies. The directive has had the unfortunate consequence of a now thriving cryptocurrency black market taking hold in Nigeria.
South Africa seems to have the right idea (as usual)
The Financial Sector Conduct Authority (FSCA) in South Africa early last month issued a warning that there were going to be more regulations for cryptocurrencies coming. This followed a slew of complaints about the number of crypto scams that had been praying on those who were entering and not familiar with cryptocurrencies.
The high risks already inherent in crypto assets is further being compounded by scam activity, as well as unregulated firms targeting consumers with marketing material that highlights the rewards, but not the potential downside, of investing in crypto assets
- FSCA via Business Tech
South Africa is looking to put more regulations to protect it’s citizens from the number of schemes out there that are praying on the uninitiated. The RBZ Fintech Sandbox could have, if it allowed cryptocurrencies and exchanges in, put those regulations from the ground up.Without the RBZ’s further proliferating the laws that govern cryptos (as well as education on cryptos) this could see a number of scams take hold in Zimbabwe (if they haven’t already). And with the Fintech Sandbox already underway (scheduled commencement date 1/03/2021), I can’t see any wiggle room to convince the authorities otherwise.You can read the rest of the Fintech Sandbox requirements for application and the program’s outline with the link below: