Zimbabwe Bans Local Banks from Processing Payments for Virtual CurrenciesMay 19, 2018
Zimbabwe recently directed banks to ban from processing payments of virtual currency.
Central bank of Zimbabwe has stopped thrift banks from processing or trading payments associated with virtual currencies like Bitcoin, Zimbabwe central bank governor said, but stopped short of prohibiting local crypto trading exchanges.
Crypto is a virtual currency wherein coded tactics are employed to regulate the making of currency and verify funds transfer. It operates separately from a nation’s central bank.
In many countries in South Africa, people who trade in Bitcoin say it provides rare security as their bank deposits drop value almost by the day while others utilize it to buy any types of items, online. Some also utilized bitcoin to get the services of companies offered online. This is also utilized to fund their kids studying abroad.
One of the biggest and renowned trading avenues for cryptocurrencies, Golix.com-bitcoin had a price of USD 12,400 yesterday.
John Mangudya, governor of Reserve Bank of Zimbabwe said in a report, Zimbabwe Central Bank hasn’t authorized or licensed by anyone to trade in cryptocurrencies and which investors and dealers didn’t have the precautions of the regulation.
He said the Reserve Bank of Zimbabwe has directed the entire banking organizations not to render banking services to facilitate anyone or individual dealing with or settling crypto currencies.
“The nature of cryptocurrency transactions makes them the currency of choice for money criminals as well as launderers.” Mangudya added.
Prices of cryptocurrencies like Bitcoin surges in the last quarter of 2017 as retail investors all over the world scrambled to get a piece of the earnings or revenues. That triggered regulatory warnings and danger to crack down on the market.
China, one of the biggest markets in the world has banned local crypto trading exchanges.
Officials from two of the biggest and most popular trading platform Styx24.com and Golix.com, other trading platform in Zimbabwe couldn’t immediately remark on the decision of the central bank.
A business insider, who regularly follows the flow of virtual currencies in Zimbabwe, commented that the RBZ veto will affect greatly the settlements between exchanges. On the other hand, sales between entities will not be affected.
According to the insider, who refused to tell the name as he isn’t authorized to talk to the press, “people can sit over a cup of coffee and transfer cryptocurrencies amongst ourselves. The whole logic of cryptocurrency is peer to peer transaction without trusted third parties”.