Zimbabwe’s central bank has recently banned domestic financial institutions from dealing with cryptocurrencies, local media outlet NewsDay reports today, May 12.
According to the report, the Reserve Bank of Zimbabwe’s (RBZ) director and registrar of banking institutions Norman Mataruka issued a circular Friday ordering all financial institutions to terminate servicing cryptocurrency exchanges within 60 days and begin to liquidate existing crypto-related accounts.
Financial institutions have been ordered to “ensure that they do not use, trade, hold and/or transact in any way in virtual currencies,” a move which applies to both businesses and individuals.
Explaining the decision, Mataruka highlighted the interconnectedness of cryptocurrency and the traditional fiat financial system, stating that the RBZ has an “obligation to safeguard the integrity of payment systems”, which the central bank is not prepared to provide for crypto.
NewsDay reports that the RBZ’s governor John Mangudya warned the public in a separate statement that individuals who trade in cryptocurrency in the country do so “at their own risk”:
“Any person who buys, sells, or otherwise transacts in cryptocurrencies, whether online or otherwise, does so at their own risk and will have no recourse to the Reserve Bank or to any regulatory authority in the country.”
In November 2017, Cointelegraph reported that the RBZ considered the use of cryptocurrencies like Bitcoin (BTC) as payment illegal until financial authorities develop a regulatory framework for the cryptocurrency.
In early April, the Reserve Bank of India (RBI) announced a similar ban, prohibiting all entities under its jurisdiction from dealing with crypto-related businesses or individuals.
RBZ’s move also follows a recent warning against cryptocurrencies from the Central Bank of Kenya (CBK), which issued a circular last month on the risks associated with crypto trading, such as fraud, hacking, and loss of data.