The Reserve Bank of Zimbabwe (RBZ) have been in the news recently due to their move to ban cryptocurrencies within the country, in a similar to move made a few months earlier by The Reserve Bank of India. As a part of this, legal action was taken against Golix, Zimbabwe’s largest active cryptocurrency exchange.
Recently, the high court have made moves which in turn have allowed Golix to continue trading in Zimbabwe.
Since the announcement of the regulations, the RBZ have been continuing a research project into cryptocurrencies and thus have now filed further legal proceedings against Golix. According to CCN:
“The Zimbabwean apex bank argues that by continuing to process crypto transactions through formal banking channels presented risks to the financial system while Golix’s platform for trading virtual currencies are not registered or regulated.”
“’While the applicant is not a licenced banking or financial institution, it went on to provide banking services,’ said Reserve Bank of Zimbabwe governor, John Mangudya in his opposing papers filed on Friday 8 June 2018.”
“He supported this by saying Golix ‘facilitates banking services, currency exchange services and money transfer services and operation of automated teller machine, all of which require licensing’ by the Zimbabwean reserve bank.”
You can see the full report by CCN for yourself, here-
Many people do see that cryptocurrencies can offer huge benefits and advantageous implications to Zimbabwe, especially from a financial perspective, considering that at the moment, the Zimbabwe FIAT currency, the Zimbabwean Dollar (which collapsed in 2009) is possibly going to re-enter production. A crypto-backed asset instead, would help boost the countries economy and as we know, could boost many other intrinsic benefits.
Furthermore, according to CCN:
“The High Court of Zimbabwe said in a landmark ruling last month that Golix can continue trading cryptocurrencies after an application to stop the reserve bank from halting crypto trading operations by exchanges.”
“Whilst it is accepted that a letter was addressed to the applicant, there was no wholesale ban on the applicant (Golix’s) operations, save to the extent of certain of the applicant’s operations that were linked to banks, bank accounts, the banking public and the banking system and posed a grave risk of introducing illicit activities and legal violations.”
It seems there is a big conflict of interest here. The RBZ want one thing, and the high court want another. This can lead to a very bitter atmosphere which in turn will not bode well for cryptocurrencies. Until this saga is settled and frankly, until the RBZ can at least legally establish some regulations, the cryptocurrency industry within Zimbabwe may struggle to gain any traction. For now, we must wait and see which side of this debate is going to win and ultimately get what they want.