Central Bank of Zimbabwe Bans Financial Institutions from Crypto Dealings

Zimbabwe’s Central Bank Bans Financial Institutions from All Cryptocurrency Dealings

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  • Reserve Bank of Zimbabwe stops all financial institutions within the country from cryptocurrencies dealings.
  • RBZ claims it has the obligation to safeguard the integrity of fiat currency payment and not cryptocurrency.

Zimbabwe: Zimbabwe becomes the latest country to bar financial institutions from cryptocurrency transaction as NewsDay, a local media outlet, reported yesterday 12th May that Zimbabwe’s central bank – the Reserve Bank of Zimbabwe (RBZ) has restricted all financial institutions within Zimbabwe from all cryptocurrency dealings.

The report stated that Norman Mataruka, the director of the Reserve Bank of Zimbabwe and registrar of financial institutions 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.

According to the report, all domestic financial institutions have been instructed to “ensure that they do not use, trade, hold and/or transact in any way in virtual currencies.” This order applies to both individuals and businesses.

Mataruka, while explaining this action, underlined the interrelationship between the digital currency and the fiat currency system, he stated that the RBZ has an “obligation to safeguard the integrity of payment systems”, which the bank is not ready to provide for cryptocurrency.

John Mangudya, the governor of the Reserve Bank of Zimbabwe, warned Zimbabweans in a separate statement that those involve in cryptocurrency dealings within the country do so “at their own risk”:

“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.”

Cryptona.co reported in November last year that the Zimbabwean Central Bank considered Bitcoin as illegal means of payment and the use of the cryptocurrency was not permitted within the country until financial regulators developed a regulatory framework for the digital currency.

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, both the Reserve Bank of India (RBI) and Pakistan banned all banks and 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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