The Bank of Zambia (BoZ) has called on members of the public to be wary of risks associated with transacting in cryptocurrencies. Cryptocurrencies, which are decentralised digital currencies with the most common being Bitcoin, have taken the global market by ‘storm’ and Zambia has not been spared.
BoZ said in a statement yesterday that the currency, which is not regulated by any central bank, can fuel money laundering, financing activities of terrorism and general consumer protection risks such as fraud and hacking. “The general public should, therefore, fully understand and be aware of the risks associated with the use of cryptocurrencies.
“In most cases, no legal recourse would be available to customers due to the unregulated nature of cryptocurrency-related transactions,” BoZ noted.
The bank said it does not oversee, supervise nor regulate the cryptocurrency landscape and thus activities related to the buying, trading or usage of cryptocurrencies are performed at owner’s risk.
The central bank has observed an increasing public interest in cryptocurrencies as evidenced by the many enquiries it has been receiving. BoZ also said despite cryptocurrencies having monetary characteristics, such as being used as a means of payment on a person to person basis, they are not legal tender in Zambia.
“To safeguard interests of members of the public and maintain integrity of the financial system in Zambia, BoZ states as follows: Section 30 of the Bank of Zambia Act vests the right to issue notes and coins exclusively in BoZ. “To date, BoZ has not issued any form of cryptocurrency. Cryptocurrencies are not legal tender in Zambia,” the statement reads.
The central bank, however, said it will continue to monitor developments around the decentralised digital currencies.