Governments and central banks have reacted to cryptocurrencies, especially bitcoin, vastly differently. Yet, it is Africa that arguably boasts such polarised views on the new financial revolution. Whereas places like Mauritius and South Africa view bitcoin as something that can benefit their societies, other countries like Kenya and Nigeria are actively opposing it.
Zambia is one African nation that falls within the latter category. The central bank in Zambia has announced that all cryptocurrencies are not legal tender, and they have tried to warn locals from using them saying that in the event of scams or market catastrophe, they have nobody else to point the finger at.
The reason that bitcoin in Zambia is not legal tender then may sound like an attempt from officials to protect its citizens. But that may not be the case exactly.
Why Has Zambia Declared Bitcoin as Not Legal?
The primary reason for the announcement is thought to be a strategy to protect the kwacha rather than citizens. This is due to many Zambians choosing to buy bitcoin instead of using the kwacha because of the country’s economic struggles and its free-falling value. Cryptocurrency appeals because it is a smarter investment opportunity – while the central bank wants to draw interest back to the local currency.
Africans are usually more open to trying bitcoin as well due to an already present money app culture. Using an online bitcoin wallet through one of Africa’s biggest providers such as Luno is not as new to peoples who have already been sending and receiving money over the internet for years. This makes the switch to crypto less of an issue for Africans and is warmly welcomed by any African unbanked populations.
Overall, the adoption of bitcoin in Zambia could help fuel economic progress, enable those living in poverty to use financial resources and add a new layer of convenience to individuals and businesses.
Can Zambian Officials Stop Crypto Use?
Even though Zambia has made this announcement, they do not have the power to prevent Zambians from choosing to buy bitcoin or hold it in a bitcoin wallet. In fact, history tells us that any statements made from governments and banks like the one mentioned above do not reduce interest.
For example, Nigeria’s place at the top of the charts for most bitcoin searches remained unchanged when the country made a similar announcement. Even in Bolivia and Bangladesh where bitcoin ownership was actually banned – and police hunt users – interest in using these virtual currencies exploded in high numbers.
Africa has the potential to be a flag-bearer of cryptocurrency. With further education on what they are and how to use them, vast numbers of society could benefit, including business owners. It appears that central banks and a lack of regulations are standing in the way. Introducing regulations could protect users and stop any financial crimes from taking place.