Zimbabwe Central Bank Defends Cryptocurrency Trading Ban

The Reserve Bank of Zimbabwe has filed opposing court papers supporting its directive to ban cryptocurrency exchange company, Golix, from dealing with banks and saying its directive was procedural.

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.

The Zimbabwean central bank, however, concedes that “research is ongoing about virtual or cryptocurrencies” the world over. It explained that it had issued the directive for banks to stop processing transactions involving bitcoin and other virtual currencies after realizing that Golix was “working with banks to aid illicit and risky” financial transactions.

Officials at Golix insist that the exchange platform adheres to strict know your customer principles to abet usage of cryptocurrencies for illicit financial flows.

Zimbabwe is facing foreign currency shortages that have prompted people to seek alternative channels to send money abroad or to buy goods from international suppliers, with bitcoin uptake slowly taking root.

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