RBZ Bans Cryptocurrency Trading In Zimbabwe

RBZ Bans Cryptocurrency Trading In Zimbabwe
Image Credit: Information Age

Reserve Bank of Zimbabwe (RBZ) banned use and trading of cryptocurrency in Zimbabwe stating the move as a way to safeguard the integrity, safety and soundness of the country’s financial system and to protect the public in general.

RBZ Registrar of Banking Institutions, Norman Mataruka in a circular state that the central bank is drawn to the risks involved with virtual currencies.

“Financial regulators around the world have identified the dangers and risks presented by virtual currencies to financial stability which include risk of loss due to price volatility, theft or fraud, money laundering and other criminal activities,” Mataruka said.

“Further, cryptocurrencies can be used to facilitate tax evasion as well as externalization of funds in violation of a country’s laws.”

RBZ goes on to state that all financial institutions are required to ensure that they do not use, trade, hold and/or transact in any way in virtual currencies and also do not provide banking services to facilitate any person or entity in dealing with or setting virtual currencies

Financial institutions are required to also exit any existing relationships with virtual currency exchanges within sixty days of the date of this Circular and proceed to liquidate and restitute existing account balances.

“Our investigations have revealed that the major cryptocurrency exchanges facilitating the trade of virtual currencies in Zimbabwe are Bitfinance (Private) Limited (Golix) and Styx24. Golix has gone further to set up an ATM machine through which cryptocurrency transactions are facilitated.,” Mataruka says.

“As Monetary Authorities, the Reserve Bank is the custodian of public trust and has an obligation to safeguard the integrity of payment systems.”

Besides Zimbabwe, countries such as Nepal, China, Russia and India banned the use of cryptocurrencies. No other African country has been known to have banned the use of virtual currency.

Zimbabweans have been using the virtual currencies to purchase goods and items abroad as access to foreign currency is increasingly becoming difficult.

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