eBusiness Weekly
Jeffrey Gogo
The Reserve Bank of Zimbabwe (RBZ) has agreed to review a proposal by a Zimbabwean start-up registered in the UK, to test a point of sale payment system that is under-pinned by cryptocurrency, including bitcoin.
The move is seen as a key turnaround on the central bank’s previous hardline — some say cautious — position regarding virtual money, which could help speed up the adoption and development of cryptocurrency in the country.
According to sources, the planned payment system works much in the same way as the conventional POS system, only that the payment terminals connect to the blockchain and settlements are made via crypto like bitcoin, ethereum, ripple or stellar.
“We have secured an agreement with a company in the UK which manufactures the devices (blockchain-based POS),” said a source that cannot be name for professional reasons.
“We are ready to enter the market in Zimbabwe should the RBZ be open to give an opportunity to complete a trial under a regulatory sandbox with full supervision from the RBZ,” the source said.
Blockchain technology
The blockchain is an emerging technological concept that uses computers to work out complex maths problems to confirm a “block” of transactions. The technology was first used in cryptocurrencies, beginning with bitcoin, the benchmark digital coin, in 2009. And now it is expanding into payments, and even national elections.
The crypto-centred payment terminals are understood to have been successfully deployed in in Colombia and in other countries in Latin America.
“As part of the agreement which we secured, the Reserve Bank of Zimbabwe will have the option to get a state-issued cryptocurrency integrated in the device should the Government decide to take this option in the future,” the source continued.
“The benefit of Zimbabwe issuing a virtual currency is that the Government will save costs involved in minting money. This is also likely to alleviate the pressure of the USD and the issue of change requiring coins to be in circulation under the current system.”
Significant move
The Business Weekly has it on good authority that the Reserve Bank of Zimbabwe has shown interest in the project, and offered to review its merits and demerits. The decision by the central bank to review the cryptocurrency payment system is significant in many ways.
First, it indicates that the central bank may be softening it’s previous hardline position on crypto, meaning exchanges like Golix still have a future in the country. It is possible that a lift of the ban on cryptocurrencies might be on the way. Not just time to give up yet for emerging Zimbabwean crypto businesses.
Secondly, it shows the RBZ, which is allowed to trade cautiously on new technologies, is finally seeing reason, which is a good thing for the adoption and development of cryptocurrencies and the blockchain technology that supports them.
Many central banks are unsure how to react to virtual money given its disruptive tendencies that seek to take away power from governments and put it into the hands of ordinary folk.
In Africa south of the Sahara, Zimbabwe had joined Namibia and a tiny few other countries to outlaw digital currencies. Discussion on the advantages of crypto adoption go beyond the scope of this article, but whatever is swaying the RBZ into opening up is something that should be fiercely encouraged and lauded.
Thirdly, the issue around a state issued digital currency — like what Venezuela has done or what Iran will soon be doing — looks more real now than ever before.
The RBZ says it has set up a unit to investigate crypto and the blockchain, but it is the virtual currency inclinations demonstrated by Zimbabwe’s new Finance Minister that yield the greatest hope.
Professor Mthuli Ncube sees crypto as a key tool for economic development, one that, perhaps, could be used to solve Zimbabwe’s entrenched currency problems. And, of course, so much more for the blockchain technology in improving financial settlements.
