The Reserve Bank of Zimbabwe (RBZ) has officially prohibited financial institutions from dealing with cryptocurrencies, as reported by local media outlet News Day today. Norman Mataruka, Director and Registrar at RBZ’s Banking Institutions, explained that this move is aimed at safeguarding the public as well as Zimbabwe’s financial system. Financial establishments have been given a period of 60 days to end any activity related to virtual currencies.
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.
Cryptocurrencies have strong linkages and interconnectedness with standard means of payments and trading applications and rely on much of the same institutional infrastructure that serves the overall financial system.
Last year in December, RBZ’s governor John Mangudya warned the public against the use of cryptocurrencies. He added that anyone who deals with them, does so without any “legal protection”. Mangudya explained, “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.”
RBZ will observe cryptocurrency activities to find those institutions which fail to comply with the given rules. Mangudya said, “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.”
After 2008’s catastrophic economic meltdown and the resulting hyperinflation, people in Zimbabwe started to look at Bitcoin. Until this year, the country was home to only one cryptocurrency exchange, Golix. Styx24 successfully launched back in March, but only a few months before the central bank decided to take a stand against cryptocurrencies.
Image Credit: Deposit Photos