DeFi protocol frontend 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:

Exchanges: Platforms facilitating the buying, selling, and trading of virtual assets against fiat currency or other virtual assets.

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).

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.

FATF (Financial Action Task Force) standards, which Zimbabwe is expected to comply with, will heavily influence these requirements.

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).

Financial Intelligence Unit (FIU): Responsible for combating money laundering and terrorist financing (AML/CFT). Any future VA framework will heavily rely on FIU guidance for compliance.

Securities and Exchange Commission of Zimbabwe (SECZ): If certain virtual assets are classified as securities under Zimbabwean law, then SECZ would have jurisdiction over their issuance and trading.

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.

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.

Travel Rule: There is no effective date for the Travel Rule in Zimbabwe, as the specific legislative and regulatory measures for its implementation are still pending.

For Travel Rule: Since the Travel Rule is not specifically implemented, there are no specific threshold amounts for the collection and transmission of originator and beneficiary information on VA transfers.

The Money Laundering and Proceeds of Crime Amendment Act (No. 6 of 2022) provides a broad definition of VASPs, covering:

Exchange between virtual assets and fiat currencies.

Exchange between one or more forms of virtual assets.

Transfer of virtual assets.

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

Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.

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.

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.