Crypto-funded debit card in Zimbabwe

Reserve Bank of Zimbabwe (RBZ): The central bank, responsible for monetary policy, financial sector stability, and licensing of financial institutions. It is the primary body driving the VA regulatory development.

Virtual Asset Service Provider (VASP) License: This is the most common umbrella term. It would likely cover:

Payment Processors: Entities engaged in transferring virtual assets, or providing services for the exchange of virtual assets for fiat and vice-versa for payment purposes.

Licensing: This typically involves a comprehensive application, detailed due diligence, meeting stringent capital, operational, and compliance requirements, and ongoing supervision. Zimbabwe is expected to adopt a full licensing regime for commercial VA operations to ensure financial stability, consumer protection, and AML/CFT compliance.

Likely to be prescribed minimum capital thresholds, which may vary depending on the type and scale of VA services offered, reflecting the inherent risks. This ensures financial stability and ability to absorb operational shocks.

AML/KYC (Anti-Money Laundering / Know Your Customer):

This will be a paramount requirement. Virtual asset service providers will be designated as "reporting entities" and will be subject to the provisions of Zimbabwe's Money Laundering and Proceeds of Crime Act (Chapter 9:24) and regulations issued by the Financial Intelligence Unit (FIU).

Customer due diligence (CDD) procedures for all users.

Ongoing monitoring of transactions.

Reporting suspicious transactions (STRs) to the FIU.

Appointment of a dedicated AML Compliance Officer.

Robust internal AML/CFT policies and controls.

It is highly probable that licensed entities will need to be domiciled in Zimbabwe (i.e., incorporated locally).

Requirements may include a physical office, local directors, and locally-based key personnel (e.g., CEO, Compliance Officer).

Innovation Hub: This serves as a platform for innovators (including those in the VA space) to engage with the RBZ, discuss their proposals, and potentially receive guidance on how their solutions might fit into existing or future regulatory frameworks.

Regulatory Sandbox: This is anticipated to be a controlled environment where approved entities can test innovative financial products, services, or business models (including those involving VAs) with real customers, but within defined parameters and under the close supervision of the RBZ, for a limited period. Successful participants in the sandbox may then be eligible for full licensing once the broader framework is established.

Partially (Framework for VASPs): Zimbabwe, as an FATF member, is committed to implementing FATF Recommendations. In October 2022, Zimbabwe promulgated the Money Laundering and Proceeds of Crime Amendment Act (No. 6 of 2022), which for the first time designated VASPs as "financial institutions" for AML/CFT purposes. This means VASPs are now subject to general AML/CFT obligations such as customer due diligence (CDD), record-keeping, and suspicious transaction reporting (STR).

General VASP Regulation: The Money Laundering and Proceeds of Crime Amendment Act (No. 6 of 2022) became effective upon its gazetting in October 2022. This is the effective date for VASPs to be considered reporting entities under Zimbabwe's AML/CFT framework.

Which VASPs are Covered:

Exchange between virtual assets and fiat currencies.

Transfer of virtual assets.

Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.

Customer Due Diligence (KYC processes).

Risk-based assessment and management.

Record-keeping of transactions and customer data.

Monitoring transactions for suspicious activities.

Reporting suspicious transactions to the Financial Intelligence Unit (FIU).

Having an appointed AML/CFT Compliance Officer.

E-money/Payment Token: If a stablecoin is designed to facilitate payments and is redeemable 1:1 for a fiat currency (or another stable asset) on demand, it would most likely be classified as e-money or a payment token under the National Payment Systems Act [Chapter 24:23]. This framework regulates payment service providers and e-money issuers.

For E-money/Payment Tokens: If a private stablecoin is classified as e-money, it would be subject to stringent reserve requirements similar to traditional e-money issuers. This typically involves:

National Payment Systems Act [Chapter 24:23]:

For Private Stablecoins (if permitted): Any entity wishing to issue a stablecoin that functions as e-money or a payment token would almost certainly require a license from the Reserve Bank of Zimbabwe (RBZ) as an E-money Issuer or Payment Service Provider under the National Payment Systems Act [Chapter 24:23].

Introduction: In May 2023, the RBZ launched the gold-backed digital token (ZiG) to enhance the local currency's stability, provide a store of value, and serve as an investment option. It is convertible into physical gold and can be used for transactional purposes.

Impact on Private Stablecoins: The introduction of ZiG significantly impacts the potential for private stablecoins. By providing a central bank-issued, asset-backed digital alternative for stability, the RBZ has effectively filled much of the space that private stablecoins might occupy. This suggests that the RBZ might view private stablecoins as redundant or potentially disruptive to its own stability efforts, making it harder for them to gain approval.