Published: Wed, May 16, 2018
Medical | By Johnnie Horton

Reserve Bank of Zimbabwe bans banking services to cryptocurrency exchanges

Reserve Bank of Zimbabwe bans banking services to cryptocurrency exchanges

Zimbabwe's Reserve Bank governor, John Mangudya has announced that the Central Bank is not licensed to trade in virtual currency and that anyone investing or trading virtual currencies is not protected by the law.

Zimbabwe, the country where Bitcoin and other cryptocurrencies were flourishing due to its ease of use and collapse of its own financial system owning to hyperinflation, received a big jolt from the country's central bank on Friday after it banned banks from all Bitcoin dealings.

After India and Iran, the latest central bank to bank crypto trading is the Reserve Bank of Zimbabwe which has given 2 months to comply with the new directives. Mataruka said the reason for the move was to protect the public and safeguard the integrity and safety of the country's financial system.

Clearly, the RBZ are taking an approach here created to protect the fiat Zimbabwean Dollar and of course, to protect members of the public from the risks associated with cryptocurrency trading.

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The official statement by the Zimbabwe bank said its attention "is once again drawn to the risks" involved with virtual currencies and "the need to ensure strict adherence to sound risk management". The sentiment amongst Zimbabweans is that converting their money into a cryptocurrency is a far safer bet than relying on what has been a fluctuating currency, not to mention the transactional limits imposed due to a lack of literal currency or diminished value of cash reserves in the country.

Last year, in November, the bank considered the use of cryptos as an illegal payment which has now been completely banned.

The cryptocurrency ban not only covers the buying and selling of virtual currencies but is also extended to maintaining crypto-related accounts, remittances, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase/sale of virtual currencies. Furthermore, the Central bank of Kenya also issued a directive warning the public from the risks linked to crypto assets such as Bitcoin (BTC).

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