Zimbabwe’s central bank issued Circular to Banking Institutions No. 2/2018: Virtual Currencies, effectively banning all crypto activity in the African nation. Businesses dealing in decentralized currencies have 60 days to comply.
Also read: India’s Supreme Court Keeps Ban on Banks’ Crypto Services, For Now
Zimbabwe Bans Crypto
Issued 11 May, the Reserve Bank of Zimbabwe, the country’s central bank, laid out seven points in ordering the shutter of things crypto within the southeast African nation. Referencing two previous circulars going back as far as three years ago, the notice explains “’banking institutions’ attention is once again drawn to the risks involved with virtual currencies and the need to ensure strict adherence to sound risk management. 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.”
Indeed, these pages first reported on the Golix crypto ATM last month, highlighting how “‘Since we got the machine, lots of people have come to check it out, to touch it,’ Golix representative Tawanda Kembo told Bitcoin.com. ‘At least 10-20 people walk in every day, since we launched it last Friday.’”
Crypto was widely thought to be something of a saving grace for the population, as we explained how the nation has a notorious relationship with monetary policy. “There is an acute liquidity crisis In Zimbabwe,” News.Bitcoin.com reported, “and so getting physical US dollars is both cumbersome and expensive (and illegal, the cash has to be bought on the black market).”
Fall of last year, another Golix spokesperson insisted, “there is currently more demand than supply of bitcoins… Interest in bitcoin has peaked as people cannot send money outside or pay for international transactions using formal banks. People have had to look for alternatives and bitcoin has been a useful solution which can be used to purchase goods on Amazon or to pay for vehicles from international suppliers and traders.”
A Government Known for Monetary Nonsense Unironically Fears Cryptocurrency
Famous for their many thousands of percent hyperinflation, Zimbabwe’s central bank unironically feared this week of how 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. Further, cryptocurrencies can be used to facilitate tax evasion as well as externalization of funds in violation of a country’s laws.”
The order requires “all financial institutions … ensure that they do not use, trade, hold and/or transact in any way in virtual currencies; ensure that they do not provide banking services to facilitate any person or entity in dealing with or settling virtual currencies; and 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.”
Prior to using a haunting turn of phrase, at the end of the order, to be “advised accordingly,” the country’s monetary authority hammered home the point by attempting to cover all the possible permutations of crypto business. The ban includes “maintaining accounts, registering, trading, clearing, collateral arrangements, remittances, payment and settlement accounts, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer / receipt of money in accounts relating to purchase / sale of virtual currencies.”
What do you think the future holds for Zimbabweans with regard to crypto? Let us know in the comments section below.
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