Zimbabwe's Central Bank Bans Crypto Trading, 60 Days for Compliance

Zimbabwe's Central Bank Bans Crypto Trading, 60 Days for Compliance

Iran also announced last month that it had banned its domestic banks from dealing in cryptocurrencies due to money-laundering concerns.

Cryptocurrency businesses in Zimbabwe are anxious after the Reserve Bank of Zimbabwe (RBZ) ordered a ban on all cryptocurrency activities, giving operators 60 days to shut down all operations, according to local reports.

In a recent circular, RBZ registrar of banking institutions Norman Mataruka stated that the ban is aimed at protecting the public and safeguarding the integrity, safety and soundness of the country's financial system.

The country has not licensed the trading of cryptocurrency and Reserve Bank governor John Mangudya was adamant that besides the licensing of the currency, it also risks becoming an avenue of criminal activity.

Since RBZ is a so-called "custodian of public trust", its obligation is to ensure that the payment systems in the country are protected.

Many Zimbabweans are trading in cryptocurrencies which have given them quick yields, but RBZ also warned that anonymity surrounding deals made it hard for law enforcement agencies to trace transactions.

Mangudya said the central bank had "directed all banking institutions not to provide banking services to facilitate any person or entity in dealing with, or settling, virtual currencies".

The decision to ban banks from all bitcoin dealings has sparked debate in the country and central bank's inability to regulate cryptocurrencies in the country.

Talking about the major cryptocurrency exchanges in the country, the notice points out that Bitfinance (Private) Limited (Golix) and Styx24 are the major cryptocurrency exchanges in the country where the latter one has also set up an ATM machine to facilitate the crypto transactions. "The Reserve Bank of Zimbabwe has not authorized or licensed any person or entity or exchange for the issuance, sale, purchase, exchange or investment in any virtual currencies/coins/tokens in Zimbabwe".

Though Africa and other third world countries say they are ready to embrace the innovative technologies such as crypto assets and blockchain as alternative payment mechanisms to the expensive traditional banking system, they are aware that allowing crypto payments would render African central banks entirely obsolete since African currencies are known to devolve into hyperinflation over and over again.

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