Zambia had previously warned citizens that cryptocurrency trading offered no legal protections but accepted the utility of blockchains.
Zambia will complete simulations of cryptocurrency use by the end of June to help it form new crypto regulations aimed at striking a balance between innovation and consumer protection.
The Bank of Zambia and the Securities and Exchange Commission said they would test the technology needed to regulate crypto.
Zambia had previously discouraged citizens from cryptocurrency trading, warning that the financial system provided them with no legal protection.
Blockchain is a decentralized ledger that uses a consensus mechanism to finalize the correct balances of users of cryptocurrencies.
Bitcoin’s utility as a bearer instrument can move money across Africa cheaper than traditional remittances.
Bitcoin payments company Strike uses Bitcoin’s Lightning layer to move money between the U.S., Ghana, Kenya, and Nigeria. Lightning allows payments between nodes over a payment channel at a lower transaction cost than on the main Bitcoin network. Strike converts dollars to Bitcoin and sends it to an African partner for conversion to local money using Lightning.