Many African countries are still reluctant to approve the use of cryptocurrency. This is not different with Zimbabwe where Reserve Bank of Zimbabwe issued a ban on trading and transacting using cryptocurrency.
Therefore, the ban goes to all the financial institutions in the country. The move was initiated by Norman Mataruka, the RBZ registrar of banking institutions. This was through a circular that went out on 11th May this year. According to him, the move was to protect the public and at the same time safeguard the safety and integrity of Zimbabwe’s financial systems.
Mataruka added that the transfer or receipt of money in accounts relating to digital currencies and accepting cryptocurrencies as collateral, opening accounts at cryptocurrency exchanges is also banned. According to him, the bank took that step since it is the custodian of public trust.
The bank, therefore, has every right to safeguard the payment system’s integrity. John Mangudya, governor of RBZ also came out to warn the public against trading in the digital money. He added that BitFinance, the operator of Golix the biggest local exchange is not regulated or licensed by the institution.
Mangudya said that whoever will carry out the transaction on cryptocurrency will be doing that at their own risk. He also added Styx24 as one of those unregulated or unlicensed exchange in the country. He said that the bank will keep a close check on both the global and regional development of cryptocurrency so as to have the right policy direction. Those trading cryptocurrencies got 60 days to do away with the operations and terminate their contracts. But the bank has not clearly come out to state the actions that will be taken if people fail to comply with the directives.
The move is a blow to the local users of cryptocurrency. This is because of many Africans who are unbanked use the crypto to pay for transport fee, top up cellphones and buy food. This is seen as a move by the bank to regain grounds since the coin has allowed the financial institutions to be an alternative to the local currencies that usually face frequent inflation. In 2016 the African remittance market was valued at 4429 billion globally. Furthermore, it is tied in with associated technology and cryptocurrencies.
Currently, Africa has one of the highest remittance costs globally and the move to ban the coin will even worsen things further. According to Olaoluwa Samuel-Biyi, a West African entrepreneur, sending money from Nigeria to Zimbabwe is challenging. This is because banks have become tiresome and payment firms are using the opportunity to exploit clients. He recommends that Bitcoin is the only solution to the whole mess.