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Zambia

Retail_Trading_Status

Allowed-Unregulated Unknown
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Status Changed

Previous status: Gray-Zone

Okay, as a specialized financial regulatory analyst, here's a detailed analysis of the changes between the "Previous Analysis" and the "New Analysis" regarding Zambia's Retail_Trading_Status. **Overall Change Assessment:** The "New Analysis" maintains the same overall "Gray-Zone" status as the "Previous Analysis." However, it refines the narrative, updates and diversifies some source materials, and subtly shifts emphasis in certain areas. The "New Analysis" appears to draw from a slightly different, possibly more focused or updated, set of research inputs, leading to some omissions from the "Previous Analysis" and some new inclusions. **Detailed Changes Observed:** 1. **Narrative Structure and Emphasis:** * **Consistency:** Both analyses agree that retail trading is not explicitly banned but lacks a specific regulatory framework, with authorities issuing warnings and working towards regulation. * **BoZ Stance:** The "New Analysis" more clearly distinguishes between the BoZ Press Release and the BoZ FAQ page as sources for the central bank's position, while the "Previous Analysis" primarily referenced an "undated press release." * **SEC Stance:** * The "New Analysis" highlights the SEC's "case by case basis" assessment for whether digital assets qualify as securities and mentions SEC warnings about specific unregulated schemes and licensure requirements. * The "Previous Analysis" mentioned a "task force established in December 2023 by the SEC to boost the country's capacity to regulate crypto assets." **This specific detail about the task force is absent in the "New Analysis."** * **Regulatory Development Timeline:** * The "Previous Analysis" explicitly mentioned the "Bank of Zambia's 'National Payment System - Vision and Strategy 2023 - 2027'" with a "timeline of 2024-2025" for formulating a digital asset regulatory framework. **This specific strategic document and its timeline are not mentioned in the "New Analysis."** * Both analyses cover the Minister of Technology and Science's 2023 announcements about testing technology for regulation and the BoZ Governor's May 2024 statements on intent to regulate. * **AML/CFT Focus:** * The "New Analysis" provides more detail on the Financial Intelligence Centre (FIC) Zambia's perspective, noting that current AML laws don't specifically address cryptocurrencies and citing a "2024 study" on unregulated crypto potentially increasing money laundering. * The "Previous Analysis" mentioned the FIC's general responsibility and the likely incorporation of FATF standards but didn't include the 2024 study or the explicit note about current AML laws not covering crypto specifically. * **Operational Exchanges:** * The "Previous Analysis" explicitly mentioned "international exchanges like Binance and VALR... offering services to Zambian residents... using Zambian Kwacha and mobile money services" and Binance's KYC adherence. * **The "New Analysis" does not explicitly name these exchanges or their specific operational details (like ZMW/mobile money access) in its narrative,** though some sources cited might allude to exchange activity. This makes the "on-the-ground" accessibility slightly less prominent in the "New Analysis" narrative. * **Clarity on Gaps:** The "New Analysis" explicitly adds "clear guidelines on aspects like taxation or KYC/AML obligations specifically tailored for crypto asset service providers" as lacking, which is a more precise articulation of the regulatory gaps. 2. **Specific, Relevant Text Excerpts:** * **Omissions in "New Analysis" (Present in "Previous"):** * The BoZ quote: "Some of these risks include money laundering, financing activities of terrorism and general consumer protection risks such as fraud and hacking..." (though the sentiment is covered). * The excerpt from the "Bank of Zambia (National Payment System - Vision and Strategy 2023 - 2027)." * The excerpt from "Techpoint Africa (reporting August 2024 on Binance)" regarding Binance's services and KYC. * The excerpt from "Proelium Law LLP" which mentioned the SEC's December 2023 task force and the idea of regulation via "Electronic Money Issuers." * The excerpt from "UEEx Technology" regarding 2023 testing. * **Additions in "New Analysis" (Not in "Previous"):** * Excerpt from "Bank of Zambia (BoZ) FAQ Page." * A more specific excerpt from "SEC Zambia Notice (August 2019)" regarding the case-by-case assessment of securities. * Excerpt from "Financial Intelligence Centre (FIC) Zambia (Mondaq summary)" regarding crypto activity being new and at owner's risk. * The Minister of Science and Technology quote sourced via "Odaily Planet Daily News / Bitcoin.com." 3. **Direct, Accessible URL Links to Specific Sources:** * **General Trend:** The "New Analysis" provides more direct PDF links for official documents (e.g., BoZ Press Release, SEC Notices) where available and seems to have found more specific landing pages (e.g., the FIC "Virtual Assets" page is more direct than the "fic-old-news" link in the "Previous Analysis"). * **Key Source Omissions in "New Analysis" (Present in "Previous"):** * The BoZ "National Payment System - Vision and Strategy 2023 - 2027" (though the previous link was a redirect, the document itself was significant). * Techpoint Africa article on Binance. * UEEx Technology article. * Africa Business Communities article on VALR. * Proelium Law LLP - Cryptocurrency Regulation Tracker. * REGTECH AFRICA article on regulation tests. * **Key Source Additions in "New Analysis" (Not in "Previous" or different versions):** * Bank of Zambia FAQs page. * Direct PDF link to SEC Zambia Notice (August 1, 2019). * Bowmans - Africa Guide to Cryptocurrencies. * Baker McKenzie - Blockchain and Cryptocurrency in Africa. * Odaily Planet Daily News (Binance Square aggregation). * A more current-looking link for Financial Intelligence Centre Zambia - Virtual Assets. * SEC Zambia Cautionary Statement on KWAKOO and ONYXCOIN. * ResearchGate - A Study of the Effects of Cryptocurrency Usage on Money Laundering and Tax Compliance in Zambia (March 4, 2024). **Summary of Key Changes and Implications:** * **Reduced Emphasis on Specific Regulatory Timelines/Entities:** The omission of the BoZ's "National Payment System - Vision and Strategy 2023 - 2027" and the SEC's "December 2023 task force" in the "New Analysis" removes some concrete (though potentially still in-progress) indicators of regulatory development that were present in the "Previous Analysis." This might subtly make the regulatory progress seem slightly less defined in the "New Analysis." * **Reduced Visibility of Operational Exchanges:** The "New Analysis" doesn't highlight the activities of specific exchanges like Binance and VALR in its narrative, unlike the "Previous Analysis." This makes the current practical ability of Zambians to trade less explicit. * **Enhanced Focus on AML/CFT Gaps and Academic Research:** The "New Analysis" brings in a 2024 academic study on money laundering risks and more clearly articulates the FIC's stance and the current limitations of AML laws concerning crypto. This strengthens the risk perspective. * **Refined Sourcing:** The "New Analysis" often provides more direct or updated links to primary sources (e.g., specific PDF notices from SEC/BoZ, a more current FIC page). * **Overall Conclusion Unchanged:** Despite these differences in detail and emphasis, both analyses correctly conclude that Zambia remains in a "Gray-Zone" regarding retail crypto trading. The "New Analysis" provides a robust, well-sourced perspective that, while omitting some details from the "Previous Analysis," introduces other valuable points, particularly concerning AML/CFT risks and more precise articulation of regulatory gaps. The changes suggest that the "New Analysis" might have been compiled with a slightly different set of search queries or a focus on different facets of the regulatory environment, leading to the inclusion of new academic research and more specific official documents, while perhaps not capturing all the news items or strategic plans highlighted previously.

Analysis ID
#328
Version
Latest
Created
2025-06-26 12:46
Workflow Stage
Live

Executive Summary

Retail cryptocurrency trading is allowed but unregulated in Zambia. The Bank of Zambia (BoZ) is the primary regulator, having stated cryptocurrencies are not legal tender and issuing risk warnings. There are plans to develop a regulatory framework for crypto assets and stablecoins. Currently, activity exists outside the formal regulatory perimeter, with users undertaking transactions at their own risk.

Key Pillars

The primary regulator is the Bank of Zambia (BoZ), which oversees financial activities and has the sole right to issue currency. The BoZ monitors cryptocurrency developments but does not currently regulate them. The SEC Zambia assesses digital assets to determine if they qualify as securities under the Securities Act, requiring registration if applicable. Compliance with general AML/KYC practices is encouraged, though not mandated by specific crypto regulations.

Landmark Laws

  • Securities and Exchange Commission (SEC) Zambia - Notice (August 1, 2019):
    • "...currently these products/assets are not regulated by the Commission unless they meet the definition of a security as defined by the Act and this... will be considered on a case by case basis."
  • Bank of Zambia (BoZ) - Press Release (Undated, referenced frequently):
    • "cryptocurrencies are not legal tender in Zambia."
  • Bank of Zambia (BoZ) Strategic Plan for 2024–2027 (Announced April 2024): Plans to "develop and implement a regulatory framework for crypto assets and stablecoins."

Considerations

Cryptocurrencies are not legal tender in Zambia. The BoZ and SEC Zambia have warned about risks, including volatility, fraud, hacking, and use for illicit activities. Engagement is at the individual's own risk, with no legal recourse under the current framework. Platforms are cautioned to comply with existing securities laws if assets meet the definition of a security.

Notes

Authorities acknowledge growing cryptocurrency usage, particularly among young people. The Bank of Zambia is actively monitoring developments and plans to develop a regulatory framework. The regulatory landscape is rapidly evolving. The Bank of Zambia (BoZ) consistently states "regulation should not constrain but enable innovation". International exchanges like Binance facilitate trading using Zambian Kwacha (ZMW) via mobile money. As of April 2025, Zambian cryptocurrency activities exist outside the formal regulatory perimeter. The Bank of Zambia Governor stated in May 2024, concerning those dealing in cryptocurrencies: "if you are a victim you are on your own at this point. But we are moving towards getting a framework to regulate that."

Detailed Explanation

As of April 2025, the retail trading of cryptocurrencies in Zambia is 'Allowed-UnRegulated'. There is no specific legislation prohibiting or formally regulating this activity. The Bank of Zambia (BoZ) has stated that cryptocurrencies are not legal tender, based on the BoZ Act, which grants the bank the exclusive right to issue notes and coins. The BoZ and the Securities and Exchange Commission (SEC) Zambia have issued warnings about the risks associated with cryptocurrencies, including lack of regulatory oversight, potential for financial loss due to volatility, fraud, hacking, and use in illicit activities. These warnings emphasize that engagement with cryptocurrencies is at the individual's own risk, without legal recourse through the current financial regulatory framework.

Despite the warnings, authorities have not banned cryptocurrency trading but adopted a cautious monitoring approach. The BoZ believes regulation should enable innovation, not constrain it, and is actively monitoring developments. The SEC Zambia assesses digital assets case-by-case to determine if they qualify as securities under the Securities Act. Platforms facilitating cryptocurrency transactions are cautioned to comply with existing securities laws if the assets meet the definition of a security. The SEC Zambia issued a notice on August 1, 2019, urging caution regarding investments in cryptocurrencies and related products, stating they are largely unregulated and not subject to the Commission's jurisdiction unless meeting the definition of a security per the Act.

Recent developments suggest a potential shift towards regulation. In April 2024, the BoZ launched its Strategic Plan for 2024–2027, which includes plans to develop and implement a regulatory framework for crypto assets and stablecoins. In May 2024, the BoZ Governor reiterated the intent to develop a regulatory framework, acknowledging the growing use of cryptocurrencies, particularly among young people, while reaffirming that current activities are undertaken at the user's own risk, stating "if you are a victim you are on your own at this point. But we are moving towards getting a framework to regulate that."

International cryptocurrency exchanges like Binance have expanded services to Zambia, allowing users to trade crypto using Zambian Kwacha (ZMW) via mobile money, indicating active retail participation. These platforms often implement their own KYC/AML procedures, though these are not mandated by specific Zambian crypto regulations. In July 2024, Binance included ZMW for trading crypto on its platform. While Zambians can trade cryptocurrencies, the activity exists outside the formal regulatory perimeter. Authorities acknowledge its existence and growing popularity, have issued warnings about risks, and have signaled intentions to develop specific regulations in the near future. The Bank of Zambia consistently states "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."

Summary Points

Okay, here's the regulatory analysis report on Retail_Trading_Status in Zambia, converted into a clear, well-structured bullet point format:

Retail Cryptocurrency Trading Status in Zambia (as of April 12, 2025)

I. Overall Regulatory Status:

  • Allowed-Unregulated: Buying, selling, and holding cryptocurrencies by individuals is permitted but lacks specific legal regulation.

II. Key Regulatory Bodies and Their Roles:

  • Bank of Zambia (BoZ):
    • Central bank responsible for monetary policy and financial stability.
    • Role:
      • States cryptocurrencies are not legal tender in Zambia.
      • Does not oversee, supervise, or regulate the cryptocurrency landscape currently.
      • Issues warnings about the risks associated with cryptocurrencies.
      • Actively monitoring developments and planning to develop a regulatory framework.
  • Securities and Exchange Commission (SEC) Zambia:
    • Regulates securities markets.
    • Role:
      • Assesses digital assets on a case-by-case basis to determine if they qualify as securities under the Securities Act.
      • Cautions platforms facilitating cryptocurrency transactions to comply with existing securities laws if applicable.
      • Urges caution to investors as cryptocurrencies are largely unregulated and not subject to the SEC's jurisdiction unless they meet the definition of a security.

III. Important Legislation and Regulations:

  • None Specifically Targeting Cryptocurrencies: Currently, no specific laws or regulations directly address cryptocurrency trading.
  • BoZ Act: Grants the BoZ the exclusive right to issue notes and coins; this right has not been extended to cryptocurrencies.
  • Securities Act: May apply if a cryptocurrency meets the definition of a security, but this is determined on a case-by-case basis.

IV. Requirements for Compliance:

  • No Specific Mandatory Requirements: Due to the unregulated status, there are no specific mandatory compliance requirements for individuals trading cryptocurrencies.
  • Potential Securities Act Compliance: Platforms facilitating cryptocurrency transactions may need to comply with the Securities Act if the assets they handle meet the definition of a security.
  • KYC/AML by Exchanges: Some international exchanges operating in Zambia (e.g., Binance) implement their own Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures, but these are not mandated by Zambian regulations.

V. Notable Restrictions or Limitations:

  • Not Legal Tender: Cryptocurrencies cannot be used as an official medium of exchange for pricing goods and services.
  • Lack of Legal Recourse: Individuals engaging with cryptocurrencies do so at their own risk, with no legal recourse available through the current financial regulatory framework in case of fraud, hacking, or other losses.
  • Warnings from Authorities: The BoZ and SEC Zambia have issued warnings about the risks associated with cryptocurrencies, including volatility, fraud, and use for illicit activities.

VI. Recent Developments or Changes:

  • BoZ Strategic Plan (2024-2027): Includes plans to "develop and implement a regulatory framework for crypto assets and stablecoins."
  • BoZ Governor Statements (May 2024): Reiterated the intent to develop a regulatory framework, acknowledging the growing use of cryptocurrencies.
  • Binance Expansion: International cryptocurrency exchanges like Binance have expanded services to Zambia, allowing users to trade crypto using Zambian Kwacha (ZMW) via mobile money.

VII. Summary:

  • Zambians can trade cryptocurrencies, but this activity is outside the formal regulatory perimeter.
  • Authorities acknowledge the existence and growing popularity of cryptocurrencies.
  • Authorities have issued warnings about the risks.
  • Authorities have signaled clear intentions to develop a specific regulatory framework in the near future.
  • Until regulations are implemented, the status remains Allowed-Unregulated.

Full Analysis Report

Report on Retail Trading Status of Cryptocurrencies in Zambia

Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

Retail_Trading_Status: Gray-Zone

1. Most Accurate Current Status: Gray-Zone

2. Detailed Narrative Explanation:

The status of retail cryptocurrency trading in Zambia is best described as a Gray-Zone. While not explicitly banned, the regulatory landscape remains largely undeveloped, creating an environment of uncertainty for individuals wishing to buy, sell, and hold cryptocurrencies. There are no specific laws or regulations that outright prohibit Zambian citizens and residents from participating in cryptocurrency activities. However, regulatory bodies have issued warnings and have not yet established a clear framework for these activities.

Historically, Zambian authorities have expressed caution regarding cryptocurrencies. The Bank of Zambia (BoZ), the country's central bank, has consistently stated that cryptocurrencies are not legal tender in Zambia. In a press release, the BoZ clarified that 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." This stance highlights the unregulated nature of the market and the lack of legal recourse for individuals in case of fraud or losses.

The Securities and Exchange Commission (SEC) Zambia has also issued notices regarding cryptocurrencies. In February 2018, the SEC urged individuals and entities to "exercise restraint and caution" when investing in cryptocurrencies and related digital products, noting that these assets are "largely unregulated and not subject to the jurisdiction of the Commission." The SEC further stated that it would assess whether specific digital assets/products qualify as securities under the Securities Act No. 41 of 2016 on a "case by case basis." This implies that while some crypto assets might fall under existing securities laws, there isn't a comprehensive regulatory framework specifically designed for cryptocurrencies. The SEC has also warned the public about specific unregulated cryptocurrency schemes and reiterated that entities providing investment advice or soliciting funds require proper licensure.

Despite these warnings and the lack of specific regulation, there is an increasing public interest in cryptocurrencies in Zambia. Recognizing this trend and the potential of the underlying technology, Zambian authorities have indicated that they are exploring the development of a regulatory framework. In early 2023, the Minister of Science and Technology announced that the BoZ and the SEC were "testing technology to enable regulation of cryptocurrency." This testing phase was expected to conclude around mid-2023, with the goal of striking a balance between fostering innovation and ensuring citizen safety. More recently, in May 2024, the BoZ Governor reiterated the intent to develop a regulatory framework and mentioned upcoming meetings to discuss global approaches to cryptocurrency regulation.

The Financial Intelligence Centre (FIC) Zambia acknowledges the existence of Virtual Assets (VAs) like cryptocurrencies and the potential risks they pose, particularly concerning money laundering and financing of terrorism. While current Anti-Money Laundering (AML) laws in Zambia do not specifically address cryptocurrencies in detail due to their unregulated status, the FIC notes that the use of any cryptocurrencies is at the owner's risk as the law does not regulate such transactions. A 2024 study indicated that an unregulated crypto environment could potentially increase money laundering activities in Zambia and recommended that the government invest in understanding and regulating digital transactions. Some service providers offering KYC/AML solutions for businesses in Zambia, including those in the cryptocurrency sector, highlight the importance of compliance with international standards.

Therefore, individuals in Zambia can technically buy, sell, and hold cryptocurrencies, as there is no law explicitly forbidding it. However, they do so in an environment that lacks specific regulatory oversight, investor protection mechanisms, and clear guidelines on aspects like taxation or KYC/AML obligations specifically tailored for crypto asset service providers. The authorities' current stance is one of caution, coupled with active exploration and development of a future regulatory framework. This transitional and undefined state places retail cryptocurrency trading in a Gray-Zone.

3. Specific, Relevant Text Excerpts:

  • Bank of Zambia (BoZ): "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." (Source: Bank of Zambia Press Release)
  • Bank of Zambia (BoZ) FAQ Page: "Cryptocurrencies are not legal tender in Zambia. Section 30 of the BoZ Act vests the right to issue notes and coins exclusively in the Bank of Zambia and to date, the Bank has not issued any form of cryptocurrency. BoZ does not oversee, supervise nor regulate the cryptocurrency landscape and all activities are therefore performed at owner's risk." (Source: Bank of Zambia FAQs)
  • Securities and Exchange Commission (SEC) Zambia: "The Commission urged “any individuals or entities that are currently investing in or intend to invest in cryptocurrencies and related products/assets to exercise restraint and caution as they do so as the products/assets are largely unregulated and not subject to the jurisdiction of the Commission.”" (Source: Freeman Law, referencing SEC Zambia Notice, Feb 2018)
  • Securities and Exchange Commission (SEC) Zambia: "The fact of the matter is that currently these products/assets are not regulated by the Commission unless they meet the definition of a security as defined by the Act and this, as indicated above will be considered on a case by case basis." (Source: SEC Zambia Notice on Cryptocurrencies And Related Digital Products/Assets, August 2019)
  • Minister of Science and Technology (as reported by Reuters, cited by CoinGeek): "Our main goal in the area of cryptocurrency is to strike a balance between innovation in terms of digital payments … against citizens' safety, particularly given that cryptocurrency is very volatile." (Source: CoinGeek, reporting on Minister Felix Mutati's interview with Reuters, April 2023)
  • Minister of Science and Technology (as reported by Bitcoin.com, cited by Odaily Planet Daily News): Felix Mutati, Minister of Science and Technology of Zambia, said that the Central Bank of Zambia and the Securities and Exchange Commission are "testing" technology to regulate cryptocurrencies. Mutati believes that Zambia needs to regulate this "revolutionary technology" because it embodies the country's "hopeful future". (Source: Odaily Planet Daily News, reporting on Bitcoin.com, February 2023)
  • BoZ Governor Denny Kalyalya (as reported by Zambia Monitor): "This is an evolving issue… we will be having a meeting where we are looking how different countries are positioning on this, so even us we are positioning ourselves how we can regulate.” Kalyalya stated that while there was growing interest in cryptocurrencies, the central bank was not issuing them. He warned: “So far if you have noticed we have not really given any indication what we have is a restriction that if you want to do that, you are on your own, but things have evolved.” (Source: Zambia Monitor, May 2024)
  • Financial Intelligence Centre (FIC) Zambia (Mondaq summary): "Crypto-asset activity is quite new in Zambia and as yet, cryptocurrencies are not legal tender in Zambia. This is the position of the Bank of Zambia. As a result, the use of any cryptocurrencies is at the owners' risk, as the law does not regulate such transactions." (Source: Mondaq, Anti Money Laundering Comparative Guide - Zambia, November 2024)

4. Direct, Accessible URL Links to Specific Sources:

Web Sources (22)

Sources discovered via web search grounding

Search queries used (7)
  • Bank of Zambia cryptocurrency regulation
  • Securities and Exchange Commission Zambia cryptocurrency
  • Zambia cryptocurrency laws and regulations
  • retail crypto trading Zambia legal status
  • Zambia AML KYC cryptocurrency
  • official statements Zambia cryptocurrency
  • Zambia digital asset regulation
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