Zimbabwe Bans Financial Institutions From Facilitating Crypto Businesses

Zimbabwe Bans Financial Institutions From Facilitating Crypto Businesses

Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), has directed domestic financial institutions in the country to discontinue relationships with cryptocurrency exchanges within two months. The RBZ claims to have taken the decision to safeguard the country’s financial ecosystem. But what exactly’s being protected?

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Banks to Cut Ties With Crypto Businesses

Zimbabwe’s central bank has ordered all Zimbabwean financial institutions to cut ties with crypto businesses, namely exchanges. The RBZ has provided a 60-day settlement period for these institutions to square up their agreements with said businesses.

Norman Mataruka, Director and Registrar of Banking Institutions at the Reserve Bank, clearly listed all the services that banks would not facilitate for crypto-centric plays, including the maintenance of payment and settlement accounts.

Mataruka suggested that the movement of digital currencies in the country represented a threat to Zimbabwe’s payment system:

“As monetary authorities, the Reserve Bank of Zimbabwe is the custodian of public trust and has an obligation to safeguard the integrity of payment systems.”

Central Bank Swims Against the Current

In a separate announcement, RBZ governor John Mangudya stated that any individual dealing in cryptocurrencies should do so at their own risk:

“The Reserve Bank of Zimbabwe has not authorized or licensed any person or entity or exchange for the issuance, sale, purchase, exchange or investment in any virtual currencies/coins/tokens in Zimbabwe. Exchanges such as Bitfinance (Private) Limited (Golix) and Styx24 are not licensed or regulated by the Reserve Bank.”

Bitcoin and other cryptocurrencies have the potential to overcome the excessive inflation rates in Zimbabwe, yet the government clearly does not seem to think so.

Zimbabwe has an underdeveloped banking infrastructure which needs rejuvenation, not entrenchment. For now, though, crypto is being boxed out in the African nation, to the detriment of economic experimentation. 

Is the Zimbabwean government on the wrong track? Share your views in the comments section.

Images via G Adventures, Businessdaily

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