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Does The Central Bank of Zambia Has The Right to Ban Bitcoin?

The Bank of Zambia (BoZ) on Friday, released a statement warning people using or trading cryptocurrency (Bitcoin) that they were doing so at their own risk. In the issued statement, Boz also warned the citizens that, there won’t be any regulatory authority to cry to in the event of theft or fraud.

The Central Bank agreed that bitcoin and other cryptocurrencies retained “some monetary characteristics, such as, being used as a means of payment on a person to person basis, but however, cryptocurrencies are not legal tender in Zambia.”

Moreover, the Zambian financial regulator, on its charge sheet, accused virtual currencies of increasing the risk of “money laundering, financing activities of terrorism and general consumer protection risks such as fraud and hacking.”

Read Also: Cryptocurrency is not threat to financial stability – FSB

Citing a section of the BoZ Act which “vests the right to issue notes and coins exclusively” to it, the bank said it “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 Right To Ban Bitcoin In The Country

According to Chibamba Kanyama, a Zambian economist, he said, “The bank has no legal provision for regulation of the (digital currency) market,” and “The crypto market developed well after the BoZ Act was instituted and there has been no effort on the part of government to revise it. Even if the act was revised, the bank would end up being publicly liable for something that is outside its domain. This means the BoZ is in order to provide this disclaimer and guidance to the Zambian market.”

In other words, The Central Bank of Zambia understands that it neither has the power nor the legal backing to shut down the emerging cryptocurrency market in the southern African country. Why? This is because, it would need parliament to amend the law that enabled its establishment for BoZ to be able to claim any authority over cryptocurrency investments or trading.

But, what could be the reason why Central Banks in Africa are all against Bitcoin and other cryptocurrencies?

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What do you think?

Written by Russell


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