The Reserve Bank of Zimbabwe (RBZ) has just banned all financial services institutions from any form of cryptocurrency trading. The directive was given last May 12 through a circular on virtual currencies.
RBZ director and Registrar of banking institutions Norman Mataruka issued said circular which stipulated that financial institutions should stop servicing cryptocurrency exchanges within 60 days. They should then begin liquidating any existing cryptocurrency accounts.
These financial institutions were made to refrain from facilitating transactions for any individual or entity dealing or settling cryptocurrencies. The ban covers all kinds of crypto-related services such as maintaining accounts, registering, trading, clearing, collateral arrangements, remittances, payment and settlement accounts, giving loans against virtual tokens, and even moving funds to accounts that are involved in cryptocurrency trading.
This move, according to a report, was part of a series of measures to “protect the public and safeguard the integrity, safety, and soundness of the country’s financial system.”
Central Bank Governor John Mangudya had the following warning for the public:
“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.
It goes without saying that the central bank does not consider these cryptocurrencies as legal tender in Zimbabwe. Although the country has not experience strict regulations in the past, it is now faced with a ban.
Establishments most affected by this ban would be the new businesses revolving around cryptocurrency such as Golix – a local cryptocurrency exchange.
This much is not surprising since a lot of players in the crypto sphere have already taken extra caution. China and India are among some of the countries banning cryptocurrencies or at least taking a strong stand against them.
Also, prior to the country’s ban on cryptocurrencies, Africa has already preceded the move with warnings coming from the Central Bank of Kenya (CBK). Although not a ban, CBK’s circular warns on the risks of engaging with cryptocurrencies such as fraudulent Initial Coin Offerings (ICO) and data loss.