The central bank of Zambia has advised the citizens that cryptocurrencies are not legal tender and that they should exercise caution trading them.
Notice Issued by Zambian Central Bank
Bank of Zambia (BoZ), the African nation’s central bank, in a press release has advised its citizens that cryptocurrencies are not recognized by it as legal tender and that investors and traders of digital assets are doing it at their own risk.
The public notice was published on the BoZ’s official website earlier on Friday. The announcement mentions the agency has observed a growing public interest in cryptocurrencies and that they have been receiving a lot of inquiries about them.
The notice clarifies:
While cryptocurrencies have some monetary characteristics, such as, being used as a means of payment on a person to person basis, cryptocurrencies are not legal tender in Zambia.
BoZ’s Stand on Cryptocurrencies
The press release goes on to state that the notice was being published to safeguard the interest of investors and maintain the integrity of the country’s financial system. Clarifying on BoZ’s stand on the matter and the risks involved, the notice states the following points:
- Section 30 of the Bank of Zambia Act vests the right to issue notes and coins exclusively in the BOZ. To date, BOZ has not issued any form of cryptocurrency. Cryptocurrencies are not legal tender in the Republic of Zambia;
- BOZ does not oversee, supervise nor regulate the cryptocurrency landscape. Consequently, any and all activities related to the buying, trading or usage of cryptocurrencies are performed at owner’s risk.
- The general public should therefore fully understand and be aware of the risks associated with the use of cryptocurrencies.
- Some of these risks include money laundering, financing activities of terrorism and general consumer protection risks such as fraud and hacking, to which in most cases, no legal recourse would be available to customers due to the unregulated nature of cryptocurrency-related transactions.
- In line with BoZ’s position that regulation should not constrain but enable innovation, BOZ will continue to actively monitor all developments.
The notice is mild in its tone and appears to educate the country’s citizens about BoZ’s position on cryptocurrencies and caution them about the risks involved. While the last point sounds positive, whether the agency will embrace digital assets or shun them in the future, only time will tell.
What is your opinion on this notification by Zambia’s central bank? Let us know in the comments below.
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