Zimbabwe Prohibits Banks From Handling Cryptocurrency Transactions

Bitcoin and crypto-currencies are not only famous in Asia or Europe, but also in Africa. The question of the legality of Bitcoin at international and national level is still unclear for some countries. Often considered illegal, they have been banned in some countries, such as Morocco. In Zimbabwe, they have been illegal since November by the Central Bank of the country, however no ban has yet been pronounced. However, the news has just fallen, the Zimbabwe forbids financial institutions to offer services related to cryptocurrencies.


Zimbabwe's central bank versus cryptocurrencies

In Zimbabwe as in the world, crypto-currencies and especially Bitcoin are enthusiastic. After the price explosion in December, this craze for Bitcoin has increased, investors want to have a piece of cake. In addition to being an investment, cryptocurrencies allow Zimbabweans to make international transactions. However, a circular has just been issued asking banks and other financial institutions to stop any interaction with cryptocurrencies within 60 days.

Banks and financial institutions had offered cryptocurrency services, but that was not legal and they were allowed. John Mangudya, Governor of the Reserve Bank of Zimbabwe, said that the RBZ had never given permission to sell cryptographic currencies; investors and were not in the legal norms.

John Mangudya said, “The nature of cryptographic transactions makes it a currency of choice for money launderers and criminals of all kinds.”


Zimbabweans and cryptocurrencies

In this Southern African nation, cryptocurrencies are a gateway to international transactions. The value of Zimbabwe’s national currency loses value almost daily, so Bitcoin and other crypto-currencies are somehow safer. For those who sell Bitcoin, in connection with the devaluation of their currency, Bitcoin offers a rare protection.

Bitcoin is an alternative to the dollar, which is hard to find in this country. To be able to obtain them, there are no other means than the black market. Moreover, not all citizens have access to the banking system.

Faced with this decision, the main trading platforms of the country Golix and Styx24.com have not yet commented on the decision of the central bank.

According to an industry insider who closely follows cryptocurrencies in Zimbabwe, this ban on the central bank will only affect exchange platforms and not transactions between individuals.
Since crypto-currencies are internet protocols based on decentralized blockchain networks, it would be impossible to ban them altogether. In China, a ban has also been imposed by the central bank of the state. However, the transactions continue to be made.

Zimbabwe’s ZICT or Information and Communication Technologies Division and other IT experts have asked the central bank to regulate crypto-currencies instead of banning them.

  • 7