Among the countries where inflation has reached its peak is Zimbabwe, which has seen some photos on social media showing a devaluation so severe that people carry bags of money to buy something relatively small.

Recently, the Reserve Bank of Zimbabwe looked at the regulatory protection status of crypto companies in a clear change from its previous stance on cryptocurrencies.

The proposed sandbox is reportedly part of the Zimbabwean government’s broader agenda to review the country’s financial sector, which has experienced massive inflation since 2007.

The Zimbabwean government is working with digital economy company Apollo to develop a cryptocurrency to support it.

The collaboration aims to give Zimbabweans access to the Apollo Payments Wallet in digital currency.

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Despite the government’s ban on crypto in 2018, peer-to-peer crypto trading continues to thrive in Zimbabwe as the country’s volatile monetary policy appears to be pushing investors towards digital currencies.

In the middle of 2019, some rumors surfaced that Bitcoin in Zimbabwe had reached 600% buying fees.

The Reserve Bank of Zimbabwe’s (RBZ) plan to create a regulatory testing environment for local crypto firms comes at a time when the government is said to be reviewing central bank crypto plans.

The Reserve Bank of Zimbabwe decides to put in place regulatory protection for crypto companies:

The Reserve Bank of Zimbabwe has proposed putting in place regulatory protection for local crypto firms.

According to the source, Joseph Mutipva, Deputy Director of Financial Markets and National Payments Systems, the plan was unveiled in a speech at the Bulawayo Prosperity Forum on March 13.

An excerpt from the text of Motepva’s speech reads:

We have already started to develop a framework for a digital economy because everything in regulation has to be well structured.

The framework, which serves as a regular sandbox, will evaluate cryptocurrency companies and how they will operate.

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The SANDPIT area will be a pilot area.

According to Mutepva, the Central Bank of Zimbabwe is striving to create a robust review framework to ensure that participating crypto firms are in line with the country’s current financial regulations.

As part of its early plans for a Crypto Regulatory Protection Fund, the Reserve Bank of Zimbabwe is reportedly focusing on companies that deal in cryptocurrency trading and remittances.

For Motepva, the proposed sandbox signals a central pivot of the Reserve Bank of Zimbabwe and the government of Zimbabwe regarding their stance on the emerging digital economy after a ban on financial institutions participating in crypto transactions in 2018.

Given the popularity of cryptocurrencies among the country’s younger population, Mutipva believes it is up to the Reserve Bank of Zimbabwe and the country’s government to devise ways to regulate the industry rather than focus on ban.

By ensuring greater government involvement in the digital sphere, he argued, problems such as access to capital, which small and medium-sized crypto companies could thrive in Zimbabwe, could be mitigated.

Marius Ritz, general manager of Africa for cryptocurrency exchange Luno, commented on the plans of the Reserve Bank of Zimbabwe to establish a regulatory sandbox and welcomed the decision as positive for the cryptocurrency region in Zimbabwe.

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In an e-mail message sent to Source It mentioned the following:

The new sandbox is excellent news.

This will be crucial for more clarity and protection, which will only help to take the crypto to the next stage.

Some people think the regulation will hinder its adoption, but we believe that it can play an important role in building trust in our sector, which we know is a major obstacle to its adoption.

According to Ritz, the creation of the regulatory hedge fund will pave the way for a constructive dialogue between crypto companies and regulators, adding in his statement:

It is important to have a close relationship between these two shareholders so that crypto companies know what regulation to expect and how they can better protect their customers.

Legalization of the crypto market amid efforts to stabilize the currency:

According to Mthabisi Tshuma, business correspondent for The Chronicle in Zimbabwe, the government appears to be interested in legalizing the crypto industry to improve the country’s financial sector.

As Tshuma stated:

The cryptocurrency market in the country is currently under review, and if all goes well, the government will take it to the financial sector, as outlined in last year’s monetary policy.

In its monetary policy statement in February, the Reserve Bank of Zimbabwe revealed its focus on stabilizing its currency.

After massive inflation since 2007, the bank appears to be aiming to eliminate exchange rate fluctuations by setting up a currency stabilization task force.

According to RBZ, exchange rate stability will lead to a corresponding decrease in inflation…

In its monetary policy statement in February, the Reserve Bank of Zimbabwe revealed its focus on stabilizing its currency.

After massive inflation since 2007, the bank appears to be aiming to eliminate exchange rate fluctuations by setting up a currency stabilization task force.

According to the regional office, the stability of the exchange rate will lead to a corresponding decrease in inflation, which will lead to a significant economic recovery in the country.

As part of a currency stabilization effort led by the country’s finance minister, RBZ plans to create an electronic foreign exchange platform that will enable free foreign exchange transactions between participating banks.

Authorized exchange agents are also allowed through authorized distributors on the platform.

Although there is no official government word, the RBZ crypto-regulating hedge fund could be a precursor to the legalization of cryptocurrencies in the country.

Currently, crypto remains largely unregulated in sub-Saharan Africa, with South Africa and Zimbabwe seemingly on the way to legalizing the cryptocurrency market.

For Zimbabwe, the goal may be to use the digital economy as a means of mitigating economic problems, while for South Africa, introducing clear laws could help combat many cases of virtual fraud in the country.

Gold-based digital currency in partnership with Apollo:

The Zimbabwean government is reportedly working with Apollo to launch a gold-backed digital currency for its citizens.

Apollo announced Friday that it has signed a memorandum of agreement with CBZ Bank – one of the country’s largest commercial banks – to develop three national fintech projects.

The proposed gold-backed digital currency is one of the three projects Apollo is currently developing for CBZ with the support of the Zimbabwean government.

Given the Zimbabwean government’s track record, introducing crypto could be a viable solution, although asset-backed cryptocurrencies haven’t shown signs of success.

Venezuela’s oil-backed petro has made little progress so far, despite the country’s government’s concerted efforts to push the introduction of the digital currency.

Like Zimbabwe, Venezuela also suffers from hyperinflation, which has been made worse by the economic sanctions imposed by the US government against the government of President Nicolas Maduro.

Stephen McCulla, CEO of Apollo, said he was very pleased to be working with the Zimbabwean government.

in Tweet Posted by Apollo management that:

It identified Zimbabwe on Thursday as a “priority country” for direct implementation of the National Crypto and Financial Solutions suite.

If other yet-to-be-announced projects include an interbank settlement network, Zimbabwe and Iran will use fintech to rejuvenate their troubled financial sector…

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