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Cryptocurrency Regulatory Framework in Zimbabwe

markets as they are outside the purview of typical central banks and related financial

sector regulators (Accenture Consulting, 2017).

However, there is quite a handful of cryptocurrency benefits, which include pos­

sible economic effectiveness; being a substitute for prevailing mediators and orga­

nizations; acting as an enabler of mobile and digital commerce; ensuring stability in

the financial system; working as a crypto-reserve currency; effectively monitoring

the supply of money; lowering transaction costs, especially for cross-border transac­

tions; and also allowing traceability (Accenture Consulting, 2017; Schrodt, 2018).

Those who support cryptocurrencies preach that a decentralized payment system

working over the internet will be less expensive than the old-style payment systems

and present organizations (Schrodt, 2018). For those who lack confidence in the ade­

quacy of the traditional financial systems, cryptocurrencies could serve as a worth­

while alternative (Bershidsky, 2017). In developed countries, the level of scepticism

may not be as pronounced as in less developed economies with emerging financial

and capital markets. Classically, advanced economies are comparatively constant

and have moderately low inflation; frequently, they also have carefully controlled

financial organizations and robust government organizations. Therefore, cryptocur­

rencies experience more extensive acceptance in countries with an advanced degree

of distrust in present systems than in countries where there is usually a high degree

of faith in current systems (Chun, 2017). However, some critics argue that the ben­

efits of cryptocurrency are obscure, as they are more futuristic than immediate.

6.2.4  The Regulation of Cryptocurrencies

The regulation of cryptocurrencies still remains an issue of concern in the African

continent and the world in general. Different and cautious approaches have been

adopted, with China, for instance, completely banning cryptocurrencies as of 2017,

while Switzerland has embraced them with an abundance of caution. Other leading

economies, such as Japan and the UK, are reportedly half-hearted. The common

thrust amongst all regulators has been their concern to monitor the markets to prevent

theft, fraud, market manipulation and money laundering (Regulatory Brief-PwC,

2018). Equally, African countries have adopted blockchain and cryptocurrencies in

mixed proportions, with most governments being apprehensive, reserved and apply­

ing an abundance of caution in their approaches. Nations like Zimbabwe, Zambia,

Swaziland and Namibia have commenced with a cautious stance, with Mauritius

being the local pacesetter (McKenzie, 2018). While there is no official position on

cryptocurrencies in Botswana, there are, however, traces of its existence and opera­

tion in certain circles largely limited to WhatsApp and Facebook groups (McKenzie,

2018). In countries such as Ghana, Kenya and Nigeria, cryptocurrencies are neither

recognized nor supported. In particular, the central bank of Nigeria is reported to

have cautioned financial institutions in 2017 against using, holding or trading virtual

currencies pending substantive regulation or decision; they are not legal in Nigeria.

Furthermore, the South African Reserve Bank also does not recognize cryptocur­

rency as legal tender or currency. The South African Revenue Service (SARS) has

also echoed the same sentiments by stating that cryptocurrencies are not authorized