On the twelfth of April, Newsday let loose the somewhat saddening news the Reserve Bank of Zimbabwe(RBZ) has ordered all financial institutions in the country to stop trading or otherwise transacting in cryptocurrencies.
According to the report, a circular was issued by Mr. Norman Mataruka, director of the reserve bank and registrar of banking institutions, which ordered banks to begin a liquidation process on all crypto-related accounts and terminate all services to cryptocurrency exchanges within sixty days.
“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,” Mr. Mataruka said.
In a move that will affect individuals and business, the country’s banks were told to ensure that they do not use, trade, hold and/or transact in any way in virtual currencies.
In a nutshell, Mr. Mataruka explained the decision by stating that the Reserve Bank of Zimbabwe is bound by an “obligation to safeguard the integrity of payment systems”. A safeguard which it is not willing or able to be extended to cryptocurrency. The move by RBZ comes after a warning against cryptocurrencies issued by the Central Bank of Kenya. Newsday reported that in a separate statement, Mr. John Mangudya(governor of the RBZ) had also warned 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.
In a statement from the biggest exchange in the country Golix, given the 60 days they have to comply they are working to see if they can come to some sort of resolution.
“We think that blockchain technology will transform the financial market space for many years to come, and Africa should not be left behind. We also think that as we explore this space, it is important to work and engage with all stakeholders, including regulators. Our team will do the best it can to reach out to both our banking partners and to the Central Bank to address their concerns.”
Whatever the reason, Zimbabwe’s government has made their point. They are not willing to cooperate.