The Bank of Zambia (BoZ) has released an official communiqué reminding its citizens that cryptocurrencies “are not legal tender in the Republic of Zambia” and asserting its exclusive right to issue currency, further advising them to “be aware of the risks associated with the use of cryptocurrencies”.
The statement went on to count the usual fears associated with crypto assets, including their employment in money laundering and the financing of terrorism, while still maintaining a commitment to “not constrain but enable innovation”.
It is unknown what exactly prompted the BoZ to issue its statements, with the bank only citing an “increasing public interest in cryptocurrencies as shown by the growing some inquiries that BoZ has received” as its reason.
Part of the BoZ’s statement is not unlike a similar one rendered last February by the Zambian Securities and Exchange Commission, where the Commission urged investors to exercise caution in dealing with assets outside its jurisdiction of regulation.
Zambia on the Blockchain
Zambia has recently been in the crypto news cycle, with the country signing a Memorandum of Understanding with the Medici Land Governance (MLG) venture, a subsidiary of Overstock.com, in August, in order to begin using blockchain technology to store land registry title data.
Medici at that time simultaneously signed an agreement with the World Bank to put its method into practice all over the so-called developing world.
Medici and the World Bank, in signing their agreement, aim to effect a sort of revolution in the ability of “the developing world [to] secure the property rights [and] infrastructure needed to overcome many of its challenges”, in the words of Overstock.com founder Patrick Byrne, an enthusiastically pro-blockchain investor.
Last month, MLG was again in the headlines as Byrne personally purchased 43% of the company, which according to MLG CEO Dr. Ali El Husseini would “provide [MLG] the more capital needed to develop systems for Zambia, the World Bank, and other potential partners so that all people can use their property assets as collateral to enter global commerce and markets.”
The BoZ announcement comes before what many predict will be a general crisis in Zambia’s economy, as the country’s un-repayable development loans both from Western institutions such as the International Monetary Fund (IMF) and increasingly from Africa-hungry Beijing, foster ever more corruption and threaten to unravel Zambia .
Even the IMF itself has recently considered that its development loans have perhaps done more harm than good.
“Zambia has become an authoritarian state”, according to a Zambian academic quoted by the Economist, with the venerable newspaper itself arguing that “Zambia cannot go on as it is”. Descriptions of the country’s president, Edgar Lungu, and his government range from “weak and venal” to “increasingly authoritarian”.
Many have speculated that people suffering the priorities of stricken economies, such as Zambia’s, are perfect candidates to embrace the use of cryptocurrencies.