The Central Bank of Zimbabwe issued a Circular on virtual currencies for banking institutions, virtually prohibiting any cryptocurrency activity in the country. The enterprises involved in transactions with decentralized currencies have 60 days to bring their activities into compliance with the new regulations.
11 may, the Central Bank of Zimbabwe issued 7 main points, effectively banning the cryptocurrency operations in the country. Recalling the two previous circular issued three years ago, in a statement, the Bank said:
«The attention of banking institutions again drawn to the risks associated with virtual currencies, and the need to ensure strict compliance with good risk management. Our research has shown that the main crypto currency exchange which facilitate the trading of virtual currencies in Zimbabwe, is Bitfinance (Private) Limited (Golix) and Styx24. Golix has even installed an ATM that facilitates transactions with cryptocurrencies».
Last autumn the representative Golix insisted that «the demand for bitcoin exceeds the supply… the Interest in bitcoin peaked, because people can’t send money abroad or carry out international transactions through the official banks. People had to look for alternatives, and bitcoin was a useful solution that can be used to purchase items on Amazon, or to pay for deliveries from international companies.»
The Central Bank of the country is notorious that made the hyperinflation of the national currency, which peaked in 2008, amounting to 79.6 billion percent. However, its members believe that cryptocurrencies carry a much greater risk to civilians. According to the statement of the Central Bank, «financial regulators around the world have identified hazards and risks, which are a virtual currency for financial stability, including the risk of losses due to price volatility, theft or fraud, money laundering and other criminal activities». Also the Bank’s representatives say that cryptocurrencies can be used for tax evasion and for withdrawal of funds in violation of the laws of the country.
The order requires that «all financial institutions are guaranteed that they will not use, sell, store, and/ or take any action in the virtual currency; denied banking services to any persons carrying out transactions with virtual currencies; cease any existing relationships with cryptocurrency exchanges within sixty days from the date of issue of the Circular and started to liquidate the existing account balances».
Simply put, the Central Bank of Zimbabwe stipulated that the cryptocurrency company was no longer able to use banking services in the country, which is essentially equivalent to a complete ban on the cryptocurrency trade.