Stablecoin issuer / redeemer in Zambia

No Explicit Classification: The Bank of Zambia has not explicitly classified stablecoins as e-money, payment tokens, or securities under a specific stablecoin regulation.

E-money/Payment Token: If a stablecoin were to function as a store of value and a medium of exchange, facilitating payments, it could potentially be brought under the purview of the National Payment Systems Act, 2007 (and its amendments). This Act regulates payment systems and payment service providers. The BoZ has the authority to issue directives concerning payment instruments.

Security: If a stablecoin offered investment-like features, or if its backing involved assets that could be considered securities, it might potentially fall under the regulation of the Securities Act, 2016, administered by the Securities and Exchange Commission (SEC) Zambia. However, this is less likely for typical stablecoins designed for payments.

Banking/Financial Service: If a stablecoin issuer were to engage in deposit-taking or other traditional banking services, they would fall under the Banking and Financial Services Act, 2017.

Anti-Money Laundering (AML) / Counter-Financing of Terrorism (CFT): Regardless of classification, any entity dealing with stablecoins would be subject to Zambia's AML/CFT framework, primarily governed by the Financial Intelligence Centre Act, No. 4 of 2020.

No Specific Stablecoin Reserve Requirements: As there is no dedicated stablecoin regulation, there are no specific reserve requirements mandated for stablecoin issuers in Zambia.

No Specific Stablecoin Issuer Licensing: There is no dedicated licensing regime specifically for stablecoin issuers.

No Specific Stablecoin Redemption Rights Legislation: Without a dedicated framework, there are no legally enshrined redemption rights specifically for stablecoin holders in Zambia.

Contractual Basis: Redemption rights would currently be purely contractual, based on the terms and conditions set by the stablecoin issuer. The enforceability of these rights would depend on general contract law.

Active CBDC Exploration: Zambia is actively exploring the feasibility of introducing a Central Bank Digital Currency (CBDC). The Bank of Zambia has been conducting a feasibility assessment.

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.

National Payment Systems Act, No. 2 of 2023:

Banking and Financial Services Act, 2017:

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.

While Zambia is committed to implementing FATF standards, the specific legal and regulatory framework for virtual assets, including the Travel Rule, is still under development or consideration.

The BoZ has historically advised financial institutions against dealing in crypto assets due to the lack of regulation and associated risks.

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.

Companies earning profits from cryptocurrency activities would be subject to the standard corporate income tax rate, which is generally 30%.