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There are over 55 million crypto holders in Africa across 33 countries. Zimbabwe is yet to find its way in the crypto world, though. The government prohibited banks from processing transactions involving cryptocurrencies in 2020. However, the situation is gradually changing. Can Zimbabwean crypto holders expect softer rules in the future? Here’s what you need to know about cryptocurrencies in Zimbabwe.Regulatory Issues

Crypto trading is rising in Zimbabwe despite the lack of regulation. The growing interest in cryptocurrencies mostly derives from rampant inflation and general distrust in the banking system. The side effect of such growth is the increasing number of crypto-related scams. According to Pepukai Chivore, who directs the Parliament Budget Office, such a situation points to an urgent need for regulation. 

Zimbabwe seems to be on its way to doing so. Currently, all crypto traders in the country must register with the RBZ and declare their transactions. Those traders also have to pay taxes now based on their earnings from such exchanges. 

Cryptos, Online Transactions, and iGaming

Government members have been debating a new cryptocurrency law since 2019. Four years later, this kind of asset still isn’t considered legal money in Zimbabwe. 

Nevertheless, Zimbabweans can use cryptocurrencies for all manner of online transactions and remittances, or just to play at an amazing crypto casino. Transactions involving cryptocurrencies are anonymous and instant and charge considerably lower fees than traditional bank transfers. That’s why this payment method is becoming more popular among online gamblers.

Also, those are quite tempting advantages in a country where 54% of adults don’t have access to the banking system at all, and where traditional remittance methods can charge anywhere between 10% and 20% for transactions, while crypto exchanges have much lower fees.

Inflation

RBZ’s friendlier attitudes towards crypto began in 2020, shifting from an outright ban to a regulatory approach. Financial authorities in Zimbabwe now seem to agree that the country needs to adapt to the digital economy. The government created a regulatory sandbox for crypto companies involving registration and taxation.

The RBZ is also developing a new, gold-backed digital currency. The initiative aims to combine the stability of gold-backed currencies with the tech innovations brought by digital tokens. However, economists seem sceptical about its potential to stabilise the Zimbabwean Dollar and fight hyperinflation. 

Zimbabwe is facing another financial crisis, with the nosedive of the Zimbabwean Dollar and annualised inflation rates at about 75% in May 2023. The country has the highest annual inflation rate in the world, reaching 1,298%. Still, this number pales compared to the 2008 crisis, when it reached an all-time high of 79.6 billion per cent. 

The Future

Zimbabweans have many reasons to distrust the banking system and the government. In this context, adopting cryptos seems to be an unstoppable development. When the price of a loaf of bread can change twice in less than 24 hours, cryptos are still a way of preserving value, no matter how volatile.

While the government is still debating the regulation of cryptocurrencies, Zimbabweans have found many ways to obtain it. Many are using VPNs to access exchanges blocked in the country and where KYC requirements are next to none. Surely, such operations involve considerable possible exposure to scammers. Yet, it seems the only way forward for many desperate Zimbabweans.