Zimbabwe’s Central Bank Bans Financial Institutions From Crypto Trading

News, Regulation | May 14, 2018 By:

The Reserve Bank of Zimbabwe (RBZ), the country’s central bank, has banned all financial institutions in the country from all forms of cryptocurrency trading.

On May 11, Norman Mataruka, RBZ director and registrar of banking institutions, issued a circular ordering all financial institutions to discontinue relationships with cryptocurrency exchanges within two months and begin to liquidate existing crypto-related accounts. Mataruka said the reason for the move was to protect the public and safeguard the integrity and safety of the country’s financial system.

All financial institutions in Zimbabwe have been ordered to ensure that they do not use, trade, hold and/or transact in any way in cryptocurrencies or provide banking services to facilitate any person or entity in dealing with or settling cryptocurrencies.

The ban includes “maintaining accounts, registering, trading, clearing, collateral arrangements, remittances, payment and settlement accounts, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase/sale of virtual currencies.”

“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,” Mataruka said. “Cryptocurrencies have strong linkages and interconnectedness with standard means of payments and trading applications and rely on much of the same institutional infrastructure that serves the overall financial system.”

In a separate statement, central bank governor John Mangudya warned the public 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.” said Mangudya. “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.”

Mangudya added that the RBZ will continue to closely monitor regional and global cryptocurrency developments in order to inform policy direction.