Zimbabwe bans banks from processing payments for cryptocurrencies

HARARE- Zimbabwe’s central bank has stopped local banks from trading or processing payments linked to cryptocurrencies like bitcoin, its governor said on Monday, but stopped short of banning local cryptocurrency trading exchanges.

REUTERS

In the southern African nation, those who trade in bitcoin say it offers rare protection as their bank deposits lose value almost by the day while others use it to fund family members studying abroad or purchase goods online.

On Golix.com, the largest of only two trading platforms for virtual currencies, bitcoin was trading at $12,400 on Monday.

Reserve Bank of Zimbabwe governor John Mangudya, however, said in a statement, the central bank had not licensed anyone to trade in virtual currencies and that dealers and investors did not have the protection of the law.

“The Reserve Bank has directed all banking institutions not to provide banking services to facilitate any person or entity in dealing with or settling virtual currencies,” Mangudya said.

“The nature of cryptocurrency transactions make them the currency of choice for money launderers and other criminals.”

Prices of digital currencies such as bitcoin rocketed at the end of last year as retail investors across the globe scrambled to get a piece of the profits. That triggered regulatory warnings and threats to crack down on the market.

China, a major market, has shut down local cryptocurrency trading exchanges.

Officials from Golix and Styx24.com, Zimbabwe’s other trading platform could not immediately comment on the central bank decision.

An industry insider who follows the cryptocurrencies in Zimbabwe said the RBZ ban would affect settlements between exchanges but sales between individuals would not be impacted.

“We can sit over a cup of coffee and transfer cryptos among ourselves. The entire logic of crypto is peer to peer transaction without trusted third parties,” said the insider, who declined to be named because he is not authorized to speak to the press.

8 Comments

  1. Afraid of being rendered irrelevant huh Mangudya?!

  2. Bitcoin is worthless artificial gold. Its like fox hunting – the pursuit of the uneatable by the unspeakable.

    I can characterize traders of cryptocurrency as “rat poison squared,” they thrive on the hope they’ll find other people who will pay more for it.

    I liken Bitcoin demand to the tulip bulb mania in 17th century Holland. (Finance gurus know that era well!) The mystique behind Bitcoin has caused its price to surge.

    If people don’t understand it, they get much more excited. People like to speculate, like to belong to something sophisticated and mysterious, they like to show off their genius, they like to gamble and of course they like to get their fingers burnt. The dangers of human psyche.

    Believe me, RBZ is doing the right thing here. Just wait and see. It’s a fools gold!!!

    Word of advise: keep it simple and understandable. If you can’t explain it to a five year old or your grandmother in terms they would understand; don’t get involved in it.

    1. japan an advanced country embraced bitcoin, bitcoin cannot be stopped! i prefer it over our useless bondnotes and bondcoins.

  3. Panic Mechanic

    @The Patriot. What you’re saying sounds more like the US$. When you look at the extreme indebtedness of the US government and country’s mega trade deficits with trading partners, the flight of manufacturing from the US to China. Appetite for American currency is being bolstered only by America’s past legacy and reputation. It’s working for the US$ it works also for Bitcoin…

  4. bitcoin kudiii kooo bhavha dzega dzega

  5. Mr reporter you could have done better by explaining kuti chii chinombonzi Bitcoin kana Cryptocurrency chacho.Please ti explenereiwo tizive tiri murima hatitomboziva kuti chii chinonzi Bitcoin kana Crypto currency

  6. How does this bitcoin crap help our people and country

  7. Pasi Nehuwori

    Comment…A woman employee at Murewa Registrar General’s Office is receipting cash paid by some people who would want to aquire birthcerticates on pieces o f useless paper.

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