Central Bank Of Zimbabwe Bans Financial Institutions From Dealing in Cryptocurrencies

Zimbabwe becomes the latest country to bar financial institutions from cryptocurrency transactions. The Reserve Bank of Zimbabwe (RBZ) has ordered all financial institutions in the country to immediately stop trading or transacting in cryptocurrencies.

The report stated that RBZ registrar of banking institutions, Norman Mataruka, released a circular on Friday 11th May instructing all domestic financial institutions to stop providing services to all cryptocurrency exchanges and begin liquidating existing cryptocurrency-related accounts. Norman gave a 60 days ultimatum.

He added that accepting cryptocurrencies as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase/sale of virtual currencies was also prohibited.

Explaining the move, the central bank official stated

“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 it will do it 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.”

Zimbabwe is not the only country opposing the conventional adoption of cryptocurrencies. October last year, the Namibian Central Bank placed a ban on the use of Bitcoin as a payment medium. Last April, the Reserve Bank of India (RBI) banned its financial institutions within the country from trading in digital currencies an ICO.

The move by the Reserve Bank of Zimbabwe followed a recent warning from the Central Bank of Kenya (CBK) against digital currencies.  CBK claims that digital currencies lack regulation, is associated with risks such as fraud, hacking, and loss of data and is not recognized as legal tender.

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