Towards virtual asset regulation and adoption of Blockchain Technologies in Zimbabwe’s context

This paper is aimed at informing the Zimbabwean public, legislators and policy makers on the importance of blockchain technology also known as distributed ledger technology. The use cases set out in this paper are not exhaustive but simply aim at highlighting the importance of the technology through a mixture of local case studies and evidence from empirical research. The major barrier to adoption in the Zimbabwean set up is the current ban on the banking sector from servicing Virtual Asset Service Providers. This has resulted in Zimbabweans being left out from participating in this emerging market whilst those who are taking part face challenges when they realise gains from their investments. More importantly, the situation has resulted in a skills gap in the market. There is no capital flowing into the economy to fund individuals and businesses to enable them to build local solutions due to uncertainty. In the second quarter of 2021, blockchain and virtual asset startups in the US received a total of $4.4 billion in Venture Capital Funds. From January 2019, a total of 40 bills were introduced to the US Congress concerning blockchain technology and virtual assets. The whole market for virtual assets has grown to over $2,2 Trillion globally and is expected to keep growing. The country risks getting left behind in this global redistribution of power over the global financial system if nothing is done urgently to address the current situation. When US companies like Tesla buy bitcoin, an investor based in Zimbabwe benefits through the increase in value of assets they hold without need to leave the country. This technology is levelling the playing field and is likely to lead to the global re-distribution of wealth. The use cases are not only limited to tokens but pervade the economy. It is in this context that this paper has been commissioned.