Anybody Dealing with Cryptos Does That at Their Own Risk
Growing Bitcoin Trade Helped Zimbabwe Before
The Reserve Bank of Zimbabwe has banned financial institutions in the country from processing cryptocurrency transactions for cryptocurrency traders and investors despite growing interest in digital monetary assets in the country.
“In order to safeguard the integrity, safety and soundness of the country’s financial system, and to protect the public in general, all financial institutions are hereby required to ensure that they do not use, trade, hold and/or transact in any way in virtual currencies,” the Zimbabwean central bank said in a circular to banks.
“As monetary authorities, the Reserve Bank of Zimbabwe is the custodian of public trust and has an obligation to safeguard the integrity of payment systems. Cryptocurrencies have strong linkages and interconnectedness with standard means of payments and trading applications and rely on much of the same institutional infrastructure that serves the overall financial system.”
The ban outlined a bunch of services that include maintaining accounts, registering, trading, clearing, collateral arrangements, remittances, payment and settlement accounts, giving loans against tokens, accepting tokens as collateral, opening accounts of cryptocurrencies exchanges and moving money in accounts relating to cryptocurrency trading.
The Central Bank Doesn’t Recognize Cryptos as Legal Tender
In a separate statement, central bank governor John Mangudya warned the public against trading in cryptocurrencies:
“Any person who buys, sells, or otherwise transacts in cryptocurrencies, whether online, or otherwise, does so at their own risk and will have no recourse to the Reserve Bank or to any regulatory authority in the country,” he said. He then added that “the Reserve Bank of Zimbabwe has not authorised or licensed any person or entity or exchange for the issuance, sale, purchase, exchange or investment in any virtual currencies/coins/tokens in Zimbabwe. Exchanges such as Bitfinance (Private) Limited (Golix) and Styx24 are not licensed or regulated by the Reserve Bank.” He also said the Reserve Bank will continue to closely monitor regional and global cryptocurrency developments in order to inform policy direction.”
In Zimbabwe there are a number of businesses that have emerged in this space over the past few years that include the local cryptocurrency exchanges like Golix as well as outfits that have been using cryptocurrencies to facilitate remittances such as Bitmari will be affected by the directive.
Golix is the biggest cryptocurrency exchange platform in Zimbabwe, and it also hosts a bitcoin ATM at its Harare offices. Officials at Golix say bitcoin trade is growing in Zimbabwe as it helps plug financial shortages in the country.
Although Golix is the most popular exchange platform for cryptocurrencies in Zimbabwe, the central bank has identified other exchanges such as Styx24.
Zimbabwe does not recognize cryptocurrencies as legal tender and the country does not have a regulatory framework for virtual currencies or cryptocurrency trading. However, it has managed to effect a ban by directing financial institutions to keep their hands off all transaction and services related to cryptocurrencies.
However, such moves also have a negative impact on legal service providers including entities that solve some problems that affect the economy. having in mind that Zimbabwe is a country that was not able to deal with its own currency. The inflation rates reached 79.6 billion percent in 2009, the highest in the world.