Custodial wallet / SaaS in Zimbabwe

Custodial License Requirements:

Segregation of Client Assets Rules:

No Specific Rules: As there are no specific custodial licenses or regulatory frameworks, there are no explicit rules mandating the segregation of client digital assets from a custodian's proprietary assets. Best practices in traditional finance would suggest segregation, but this is not legally mandated for crypto custody in Zimbabwe.

No Specific Requirements: There are no specific insurance or bonding requirements for digital asset custodians.

No Specific Mandates: While cold storage is a widely recognized security best practice for managing digital assets, there are no specific legal mandates or requirements for its use by custodians in Zimbabwe.

No Specific Definition: The term "qualified custodian" and its associated definitions, commonly found in more mature regulatory jurisdictions (like the US under SEC rules), do not exist within Zimbabwe's current regulatory landscape for digital assets.

National Financial Technology Sandbox (2021): This is the most significant development pointing towards future regulation. Launched by the RBZ, the sandbox allows innovative fintech solutions, including those involving digital assets, to be tested in a controlled environment. While not legislation itself, insights gained from the sandbox are expected to inform the development of future laws and regulations.

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.

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

Custody Providers: Entities providing services to safeguard virtual assets or instruments enabling control over virtual assets on behalf of others.

Registration: In some regimes, registration might be a simpler, less rigorous process for lower-risk activities or for certain types of market participants (e.g., basic disclosures).

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).

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).

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).

Not Adopted (Travel Rule Specifics): While VASPs are regulated, the specific requirements of the FATF Travel Rule – mandating the collection and sharing of originator and beneficiary information for virtual asset transfers – have not yet been specifically legislated or enforced. The FATF's Mutual Evaluation Report for Zimbabwe (October 2022) highlighted this as an area needing improvement, stating that measures to implement the Travel Rule were not yet in place.

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.

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

Essentially, any entity in Zimbabwe that performs these services professionally and for financial gain is considered a VASP and falls under the purview of the AML/CFT Act.

For General AML/CFT: VASPs, as regulated financial institutions, are generally required to have internal systems and controls for:

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.