Reserve Bank of Zimbabwe bans all cryptocurrency trading

Getting your Trinity Audio player ready...

Cryptocurrency businesses in Zimbabwe are worried after the Reserve Bank of Zimbabwe (RBZ) ordered a ban on all cryptocurrency activities, giving operators 60 days to shut down all operations, according to local reports.

On Friday, RBZ registrar of banking institutions Norman Mataruka issued Circular No. 2/2018 to banking institutions on May 11, telling all cryptocurrency related businesses have a grace period of two months to wind up their operations before the ban becomes effective. The reserve bank stated that there is need to have measures in place to avoid risks that come with trading in cryptocurrencies.

Mataruka, in the circular, said that accepting cryptocurrencies as collateral, opening accounts of exchanges dealing with crypto and transferring or receiving money in accounts related to buying and selling of virtual currencies will be a violation.

This is not the first time the financial authority raised concerns over crypto trade. In November 2015 and December 2017, RBZ issued circulars to the public and relevant authorities warning against crypto trade.The bank believes financial institutions should follow sound and strick management, which they fear the cryptocurrency market does not offer.

The ban looks to protect the people from money laundering, fraud, price violations amongst other issues that arise with crypto exchanges. The reserve bank said its goal is to prevent individuals from evading their tax duties.

Virtual currency exchanges in Zimbabwe stand to suffer great losses as a result of the recent directive. Golix, one of the major exchanges in the country, had ATMs installed in various parts of the country. Alongside Golix, Bitfinance and Styx24 also face business uncertainties.

Zimbabwe is following suit after various central banks in other parts of the world, like India, declared a ban on cryptocurrency trade. Last month, Danske Bank banned investments and other cryptocurrency transactions due to lack of protection for investors.