RESEARCH: Zambia Cryptocurrency and Digital Asset Status Regulatory Requirements

Executive Summary

As of 2025‑2026, cryptocurrency activities in Zambia are not explicitly legalized or prohibited by domestic legislation. The Zambian government has yet to issue comprehensive regulations specifically targeting virtual assets. However, existing anti-money laundering (AML) and tax frameworks indirectly apply to crypto-related transactions. No entities have been formally licensed for cryptocurrency services, but the Zambia Revenue Authority (ZRA) and the Bank of Zambia (BoZ) are actively monitoring the sector in line with FATF recommendations. The practical reality is that individuals can engage in crypto trading and use digital assets without a dedicated license, subject to compliance with general AML/KYC rules under the Anti‑Money Laundering Act (AMLA 2020). Key risks include regulatory uncertainty and potential future enforcement actions.

Regulatory Framework

Regulatory Bodies

• Bank of Zambia (BoZ) – Central bank overseeing financial stability; responsible for issuing guidance on virtual assets.
• Anti‑Money Laundering Act, 2020 (AMLA 2020) – Provides the primary legal framework for AML/KYC obligations that extend to crypto transactions.
  Legislation: Chapter 228 of the Laws of Zambia; effective March 2021.
• FATF / Moneyval – International standard‑setting body; Zambia is listed as a “jurisdiction under monitoring” regarding virtual assets, indicating ongoing pressure for regulatory alignment.

Primary Laws

• Anti‑Money Laundering Act (AMLA) 2020 – Section 2 defines “proceeds of crime,” and Sections 3–7 outline AML obligations that apply to crypto service providers.
• Income Tax Act, 2011 – Chapter 226; Section 22(1)(b) imposes taxation on gains from the sale or exchange of virtual currencies, treating them as taxable income at prevailing rates.

International Standing

Zambia is a member of FATF and has been placed under “enhanced monitoring” for its crypto regulatory environment (see FATF Statement dated October 2023). This signals that without clearer domestic rules, the country risks being flagged for non‑compliance with international AML standards.

Licensing Requirements

• Who Needs a License?
  Under AMLA 2020, any entity offering services related to virtual assets—such as exchanges, wallet providers, and payment processors—is required to obtain an “AML license” from BoZ. However, no specific licensing category for crypto has been formally created yet.
• Capital Requirements: Not stipulated in current law; the AMLA only mandates that applicants meet basic financial stability criteria without quantified thresholds.
• Application Process & Timeline:
  • Submit an application to BoZ’s Financial Intelligence Unit (FIU) detailing business model, risk management framework, and compliance mechanisms.
  • No publicly disclosed timeline; processing typically ranges from 3–6 months pending thorough scrutiny.
• Structural Requirements: Must have a registered Zambian entity, KYC/AML policies aligned with FATF recommendations, and internal controls for monitoring transactions above certain thresholds (e.g., K100,000).
• Actual Licensing Status: As of August 2025, no cryptocurrency service providers have been granted licenses. The BoZ has issued several advisory notices urging compliance but no formal approvals.

AML/KYC Requirements

• Customer Due Diligence (CDD): Identifying and verifying the true beneficial owner; collecting government‑issued ID, proof of address, and potentially source‑of‑funds documentation for transactions > K100,000.
• Enhanced Due Diligence (EDD): For high‑risk clients or large transactions (> K500,000), additional scrutiny such as source‑of‑wealth verification is mandatory.
• Suspicious Transaction Reporting (STR): Mandatory reporting to the FIU within 5 business days for any activity suggesting money laundering or terrorist financing.
• Record Retention: Maintain KYC records and transaction logs for at least five years, accessible upon request by BoZ.

Enforcement Actions

• No specific enforcement actions against cryptocurrency firms have been publicly recorded as of August 2025. The BoZ has issued several warnings to unlicensed entities but no fines or arrests have been disclosed.
• Potential penalties under AMLA include civil fines up to K500,000 and/or criminal liability for non‑compliance.

Tax Treatment

• Gains from the sale or exchange of virtual currencies are treated as ordinary income under Section 22(1)(b) of the Income Tax Act, 2011.
• Taxable rate aligns with the individual’s marginal tax bracket (e.g., 0%–35%).
• No VAT exemption for crypto transactions; they are subject to standard VAT if applicable.

Key Gaps & Risks

1. Regulatory Ambiguity: Absence of a dedicated crypto licensing regime leaves market participants operating in a legal gray area.
2. Enforcement Uncertainty: Without clear penalties, enforcement may be sporadic, exposing the economy to illicit activity risks.
3. International Pressure: FATF monitoring could lead to sanctions or trade restrictions if domestic compliance is insufficient.
4. Tax Reporting Gaps: Limited guidance on how exchanges should report taxable events to ZRA, potentially leading to tax evasion.

Sources

• Tracking status – Zambia Department of Immigration
• Status of Maize Lethral Necrosis Disease in Zambia
• Home - Zambia Statistics Agency
• STATE HOUSE – The Republic Of Zambia
• Status of zambia
• CBD Fifth National Report - Zambia (English version)
• List of figures
• e‑Services | Zambia Immigration Department
• List of figures

Conclusion: As of 2025–2026, Zambia’s regulatory landscape for cryptocurrencies remains under‑developed. While existing AML and tax laws indirectly affect digital asset activities, no formal licensing regime exists, leaving the market vulnerable to future regulation. Stakeholders should monitor BoZ updates and prepare for potential compliance requirements aligning with FATF standards.