On-shore VASP in Zambia
Locally-incorporated VASP that operates under full local jurisdiction, holding all required licenses and registrations.
On-shore VASP is conditionally permitted in Zambia with a local entity, subject to AML obligations and high licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- General AML/CFT obligations under the Anti-Money Laundering and Countering of Terrorism Act, No. 13 of 2010 apply to financial transactions — including those involving virtual assets — but no specific VASP-focused AML/CFT obligations or Travel Rule requirements have been enacted.
- Reporting entities must file suspicious transaction reports (STRs) with the Financial Intelligence Centre (FIC) Zambia for any transactions suspected of involving money laundering or terrorist financing.
- As per ESAAMLG's 2019 Mutual Evaluation Report, Zambia has not imposed explicit AML/CFT obligations on VASPs, meaning enforcement would rely on general financial crime penalties under the Act (fines and imprisonment).
- No defined threshold amounts for Travel Rule applicable to VASPs — the framework is still under development.
Key Restrictions
- No specific licensing or regulatory framework for virtual asset service providers (VASPs) currently exists — operations are in a legal 'grey area.'
- Cryptocurrencies are not recognized as legal tender by the Bank of Zambia.
- The Bank of Zambia has publicly warned the public that crypto transactions carry no regulatory recourse or investor protection.
- Any entity operating with virtual assets currently does so without a specific legal mandate from any Zambian regulator.
- The BoZ has historically advised financial institutions against dealing in crypto assets.
Key Risks
- Regulatory ambiguity — no clear licensing pathway exists, creating significant uncertainty for any on-shore VASP incorporation.
- Enforcement risk — the BoZ and FIC could treat unregulated VASP activity as unauthorized financial services or money laundering, with potential for severe fines or imprisonment under general AML law.
- Reputational and PR exposure — operating in an unregulated grey area while regulators have explicitly warned the public against crypto presents consumer trust and media risk.
- Tax uncertainty — cryptocurrency is not explicitly covered under Zambia's Income Tax Act for capital gains, but trading profits could be recharacterized as business income at 30% corporate rate; VAT treatment is unclear for VASP service fees.
- Potential for sudden regulatory change — BoZ has indicated it is developing a virtual assets framework and may impose retroactive or transitional compliance burdens.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Unregulated, but Not Banned: Crypto trading and the operation of crypto exchanges in Zambia are not explicitly illegal, but they are also not officially regulated or licensed by any specific framework for virtual assets. This places them in a "grey area."
Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Zambia.
No Investor Protection: Since they are unregulated, consumers engaging in crypto transactions do so at their own risk, with no recourse to the BoZ or other regulatory bodies for protection against loss, fraud, or operational failures of exchanges.
National Payment Systems Act, No. 2 of 2023:
Anti-Money Laundering and Countering the Financing of Terrorism Act, 2010 (as amended):
No, not specifically for virtual assets and VASPs. Zambia's primary AML/CFT legislation, the Anti-Money Laundering and Countering of Terrorism Act, No. 13 of 2010 (and its amendments), as well as associated regulations, does not explicitly extend to the comprehensive regulation of virtual assets or the oversight of VASPs as financial institutions or Designated Non-Financial Businesses and Professions (DNFBPs).
The ESAAMLG's 2019 Mutual Evaluation Report of Zambia highlighted significant gaps in this area. It noted that virtual assets were not adequately covered by the AML/CFT framework, and there was no specific licensing or registration regime for VASPs.
Which VASPs are Covered:
Currently, none are explicitly covered under a specific regulatory regime for virtual assets. As per the 2019 ESAAMLG MER, Zambia had not identified or defined VASPs under its AML/CFT laws, nor had it imposed AML/CFT obligations on them. Any entity operating with virtual assets in Zambia currently does so in a largely unregulated environment from an AML/CFT perspective, though the Bank of Zambia has issued warnings regarding the risks associated with cryptocurrencies.
However, if an entity were found to be involved in money laundering or terrorist financing activities using virtual assets, they would be subject to the general penalties under the Anti-Money Laundering and Countering of Terrorism Act, No. 13 of 2010, which include severe fines and imprisonment.
Anti-Money Laundering and Countering of Terrorism Act, No. 13 of 2010: This is Zambia's principal AML/CFT legislation. While it is the foundational law, it does not specifically address virtual assets or VASPs. Finding an official, up-to-date government-published link can be challenging, but it forms the basis of the Financial Intelligence Centre's (FIC) operations.
Financial Intelligence Centre (FIC) Zambia: The FIC is Zambia's financial intelligence unit and the primary body for AML/CFT oversight.
Currently, there are no specific licenses for crypto asset custodians in Zambia. Financial institutions dealing with traditional securities or funds require licensing from the Bank of Zambia or the Securities and Exchange Commission, but these licenses do not extend to, nor are there separate licenses for, digital asset custody.
The BoZ has historically advised financial institutions against dealing in crypto assets due to the lack of regulation and associated risks.
Bank of Zambia's Fintech Regulatory Sandbox and Virtual Assets Framework: In recent years, the Bank of Zambia has indicated its intention to develop a comprehensive framework for virtual assets. This includes exploring the possibility of a regulatory sandbox for fintech innovations, which could eventually lead to specific regulations for digital asset service providers, including custodians.
Caution and Warnings: The Bank of Zambia consistently advises against the use of cryptocurrencies due to risks and their unregulated status.
No Legal Tender Status: Cryptocurrencies are explicitly not recognized as legal tender in Zambia.
Lack of a Specific Regulatory Framework: As of now, there isn't a comprehensive regulatory framework specifically governing cryptocurrency exchanges or services that would allow for detailed enforcement actions akin to those seen in more established crypto jurisdictions.
Application to Cryptocurrency: Cryptocurrency is not explicitly listed as one of the specified assets subject to capital gains tax under the Income Tax Act.
Potential Recharacterization: However, if an individual or entity is frequently buying and selling cryptocurrency with the intention of making a profit (i.e., engaging in speculative trading), this activity would likely be considered a business activity, and the profits generated would be subject to income tax rather than capital gains tax.
Companies earning profits from cryptocurrency activities would be subject to the standard corporate income tax rate, which is generally 30%.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — a locally-incorporated on-shore VASP may operate in Zambia only in a legal grey area, as no specific VASP licensing framework exists, though general AML/CFT obligations apply and the Bank of Zambia has consistently warned against crypto activities; a formal regulatory framework (potentially under the National Payment Systems Act, 2023) is under development but not yet in force.
Questions this verdict aims to answer
- What license(s) are required to operate locally?
- What capital, governance, and reporting obligations apply?
- What is the application process and timeline?