On 5 April 2024, the Bank of Zambia (BoZ) launched its Strategic Plan for the period 2024–2027, which outlined focus areas for the duration of the Plan.
The Plan was launched in Lusaka, under the theme “Promoting Inclusive and Sustainable Development in a Digitalized World”.
The Plan, which is the seventh in the series, is anchored on four focus areas: price stability, financial stability, financial inclusion, and organisational resilience and growth, directed at addressing the key challenges and opportunities in the operating environment.
Under financial stability, BoZ intends to strengthen its supervisory framework by, among other things, entrenching ESG practices, improving cyber risk management, and adopting modern technologies.
Of note is the plan to develop and implement a regulatory framework for crypto assets and stablecoins.
The Plan’s objective aligns with the aspirations of the National Payment System Vision and Strategy 2023–2027, in which Zambia has planned to explore the application of digital currencies and assets in both the public and private sectors to promote financial inclusion.
The emergence of central bank digital currencies (CBDCs) and crypto assets marks a transformative era in global finance. CBDCs, issued and backed by central banks, represent a digital form of fiat currency, while cryptocurrencies are decentralised digital assets that operate on blockchain technology. Vision 2023 will explore potential use cases of CBDCs and potential regulatory framework for crypto assets.
National Payment System Vision and Strategy 2023–2027.
Section 30 of the Bank of Zambia Act vests the right to issue notes and coins exclusively in the BoZ. However, to date, BoZ has not issued any form of cryptocurrency. Cryptocurrencies are not legal tender in the Republic of Zambia.
Currently, the Bank of Zambia does not oversee, supervise, or regulate the cryptocurrency landscape.
Notwithstanding, and as outlined in Vision 2027, which strives to align the Zambia National Payment System with global trends and international best practices, BoZ continues to actively monitor all development, which aligns with its position that regulation should not constrain but enable innovation.
Central bank digital currencies in Africa
CBDCs are digital versions of cash that are more secure and less volatile than crypto assets because they are issued and regulated by central banks. They correspond to digital money denominated in the national unit of account and liability of the central bank.
Several African countries including Nigeria, Kenya, South Africa and Ghana, are exploring the potential of CBDCs, with some taking actual measures towards their adoption.
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