Zambian Central Bank Warns Consumers that Cryptocurrencies Not Legal Tender, Must Be Used at Own Risk

The Central Bank of Zambia has issued a press release warning locals that it is the only body with the legal right to issue currency in the country. Cryptocurrencies in Zambia, therefore, are neither, “overseen, supervised nor regulated,” by the bank and should only be used, “at owner’s (own) risk.”

The bank reportedly says it is seeing an increase of interest in digital currencies, “as evidenced by the growing number of enquiries that BoZ has been receiving on the subject.”

Though the BoZ acknowledged that some cryptos are being honoured among parties doing peer-to-peer transactions, they said the public should be very aware of “associated risks” given a lack of established legal recourse:

“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.”

The BoZ nonetheless added, “regulation should not constrain but enable innovation,” and said it would, “continue to actively monitor all developments.”

Advocates have argued that cryptocurrency networks like Bitcoin, which can be accessed via an Internet-connected cellphone, could bring a relatively low-cost payments option to places with little developed financial infrastructure otherwise.

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