Zimbabwe Bans Cryptocurrency Trading

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Zimbabwe Bans Cryptocurrency Trading

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Zimbabwe has issued instructions to all financial institutions in the country to move away from any partnerships, relationships, or associations with all cryptocurrencies, according to a local news source.

The Reserve Bank of Zimbabwe registrar Norman Mataruka said these precautions were issued to protect the general public, as well as concerns for the country’s financial infrastructure. The institutions have 60 days to cut off ties and liquidate account balances.

“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,” said Mataruka.

This was further specified into any enterprises that maintained accounts, registered, traded, cleared, had collateral agreements, sent remittances, had payment and settle accounts, and gave loans against virtual tokens.

While the statements don’t affect personnel that wish to handle cryptocurrency, central bank governor John Mangudya in a separate statement advises against it:

“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.

Mangudya continued, talking about companies like Styx24, and Bitfinance, popular cryptocurrency exchanges in Zimbabwe:

“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.”

Bitcoin gained popularity in the country last year, due to increasing inflation coupled with frustrating capital controls that prevented people from using money domestically, and restricted remittances outside of their borders.

Last year, Zimbabwe experienced a military takeover at the highest level, further shaking people’s trust in the government. The combination of hyperinflation, political instability, and restricted liquidity, were key factors in driving demand to Bitcoin and other cryptocurrencies.

With Zimbabwe trading Bitcoin at a premium compared to the rest of the world, it will be interesting to see how these events layout in the market.

 

 

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