Zimbabwe Cryptocurrency Laws Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
On December 20, 2017, the Reserve Bank of Zimbabwe issued a statement declaring that virtual currencies did not have legal tender status in Zimbabwe. Moreover, the Reserve Bank of Zimbabwe issued the following public warning regarding cryptocurrencies:
[T]he use of and trading in cryptocurrencies or virtual currencies is not regulated by the country’s laws and presents risks such as money laundering, terrorism financing, tax evasion and fraud. Under the existing legal and regulatory dispensation, any person who invests in virtual currencies or participates in any transaction involving virtual currencies does so at own risk and will not have legal protection from, or recourse against, any regulatory authority.
In May 2018, the Reserve Bank of Zimbabwe (“RBZ”) issued a circular, ordering all financial institutions to:
Not use, trade, hold, and/or transact in virtual currencies;
Not provide banking services to facilitate any person or entity in dealing with virtual currencies; and
Terminate any existing relationships with virtual currency exchanges within 60 days.
Notably, in March 2020, the Zimbabwe government changed course and announced its intent to regulate rather than completely ban cryptocurrency. In a speech during the Sound Prosperity Economic Forum, Josephat Mutepfa, the Deputy Director for Financial Markets and National Payment Systems of the RBZ, announced that the government had started developing a fintech framework, which would serve as a regulatory sandbox for cryptocurrency companies.
Further, Zimbabwe’s government is also pursuing a partnership with Apollo Fintech to develop and launch a gold-backed digital currency for its citizens.
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries: