Zambia plans to end crypto regulation tests by June  

14 Apr 2023

Zambia hopes to conclude tests simulating real-world cryptocurrency usage by the end of June, according to Science and technology minister Felix Mutati.

With the aim of establishing regulations that focus on innovation and citizens' safety, Zambia also needs digital infrastructure, including digital identities, before crypto can be introduced, Mutati said this week.

Last year, the Central African Republic announced it had made Bitcoin legal tender, yet other countries in Africa have shown more caution, with banks in Nigeria prohibited from handling crypto assets, Reuters news agency reports.

"Our main goal in the area of cryptocurrency is to strike a balance between innovation in terms of digital payments ... against citizens' safety, particularly given that cryptocurrency is very volatile," the minister said.

"The central bank is simulating that to see what would happen in the real world. The results will assist us (in) the formulation of the regulation."

Furthermore, when asked whether investments had been postponed or cancelled due to the country's debt restructuring delays, Mutati went on to say: "What we are seeing is increased appetite to invest in Zambia."

The country's Treasury secretary said this week that Zambia could lose out on gains made from economic reforms should the $18.6 billion of external debt restructuring experience additional delays.

Chinese creditors hold the largest amount of Zambia's external debt, standing at around $5.7 billion at the end of last year, as per government data.

Mutati added that the way in which Chinese loans were agreed upon during his time as finance minister depended on the project.

One example is the Kafue Lower Gorge hydropower project, which saw state-owned power company Zesco approach the Chinese Sinohydro construction company, funded by the Export-Import Bank of China and Industrial and Commercial Bank of China with a $1 billion loan.