Important information arrives from Zimbabwe, a country that has experience a surge in cryptocurrency interest in the last years. This time, one of the most prestigious virtual currency exchanges in Africa, and the most used in the country, Golix, has taken the country’s central bank, the Reserve Bank of Zimbabwe, to court. Since their court appearance, the reserve bank has decided to lift the ban on cryptocurrency trading in Zimbabwe.
The decision was taken due to the fact that the bank banned cryptocurrency trading activities in the country. According to Golix, the ban on virtual currency trading is unconstitutional because there are no laws that empower the institution to take such moves. This has since been overturned in a landmark court case.
Golix Takes Zimbabwean Central Bank to the Court
The first step taken by the central bank was to ban banks from processing cryptocurrency transactions. After it, Golix was attacked. The Central Bank of Zimbabwe ordered to cryptocurrency exchange to stop operating in the country. Golix does not only have a trading platform, but it also runs a cryptocurrency ATM in Harare.
The letter sent to Golix, dated May the 15th, reads as follows:
“All cryptocurrency exchange houses operating in the country, including Bitfinance (Private) Limited (also known as Golix), are required to cease all virtual currency exchange operations.”
It is important to mark that Zimbabwe has very important problems with its currency. During the last decade, the Central Bank has created one of the highest inflation rates ever registered in the world. Its citizens are using Euros, Dollars and other more stable currencies due to the fact that the institution has no more credibility to print a national currency.
Bitcoin and cryptocurrencies have been expanding as well, and when Bitcoin reached its all-time high back in December 2017, it was traded at premium prices. Currencies like Ethereum or Litecoin could be used so as to transact smaller sums of money, and bitcoin as a hedge against the economic situation in the country.
Now, Golix is trying to start legal actions against the central bank. The exchange is seeking that the High Court in Harare would set aside the decision taken by the central bank.
In its application to the High Court in Harare, Golix wrote:
“The ban in effect outlaws and classifies as illegal Applicant’s operations. The Respondents are in fact purporting to classify the trade in cryptocurrency as illegal.”
Additionally, Golix explains that lawmaking decisions should be taken by the legislative power and not by the central bank.
Cryptocurrencies are one of the most valuable tools that individuals have against the economic measures taken by governments. With virtual currencies citizens are free from financial institutions and protected against deflationary policies taken by populist governments all over the world.
Inflation is a disease that has been suffered by many countries in every single continent. At the moment, Venezuela, Egypt, Argentina, Ukraine and other African countries. With cryptocurrencies, people are able to save and be sure that they are operating with a currency that will not be used as a political tool.