Just as we report positive news from Thailand with regards to cryptocurrency regulation, we are now seeing reports of quite the opposite from the Zimbabwe central bank, the Reserve Bank of Zimbabwe (RBZ), in a move that does resonate what we saw last month, from the Reserve Bank of India.
With Zimbabwe now seemingly on the against side of the cryptocurrency argument, we could expect some backlash to occur within the cryptocurrency community, perhaps on a similar scale to what we have seen in India, with the launch of a petition and appeals to the high court of Delhi.
According to CCN, the RBZ have officially banned all banks and financial groups from processing any cryptocurrency transactions for traders and investors. The bank has said:
“In order to safeguard the integrity, safety and soundness of the country’s financial system, and to protect the public in general, all financial institutions are hereby required to ensure that they do not use, trade, hold and/or transact in any way in virtual currencies.”
Many people are seeing this as a regressive move, given that Zimbabwe as a country is known for its struggling financial system. People have turned to Bitcoin and cryptocurrencies to help seek an alternative to the Zimbabwean Dollar, a currency that sits against the US Dollar at a value of around 0.00276.
Clearly, the RBZ are taking an approach here designed to protect the fiat Zimbabwean Dollar and of course, to protect members of the public from the risks associated with cryptocurrency trading. Many people do consider this sort of restriction to be censorship, something the industry does not take very kindly too.
Therefore, we expect some backlash to arise as a result of this.
Golix, the biggest cryptocurrency exchange operating in Zimbabwe have passed comment, stating that Bitcoin trade is growing in the country as it is helping to plug certain financial shortages. With this in mind, other exchanges in Zimbabwe will no doubt feel the pressure from these regulations in the coming weeks.
Overall, this is an unfortunate turn of events for cryptocurrencies and the blockchain industry. For now, we must await some more specific information from the RBZ as to the scale of these regulations. At the moment, things are a little unclear, hopefully in due time, the RBZ will be able to explain a more detailed plan. In the meantime, we expect people to challenge this decision.
For now, we should expect trading in Zimbabwe to continue. Of course, as this news gets out, we will see volumes reduce, when this happens though, we always find that community spirit gets the better of the regulators.