Zimbabwe Bans Banks From Processing Crypto Payments In Bitcoin (BTC) Regulation Effort

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Zimbabwe

In a bitcoin (BTC) regulation move the central bank of Zimbabwe has prohibited local banks from processing payments which are linked to digital currencies. The governor of Zimbabwe?s central bank did not however ban local virtual currency exchanges.

In Zimbabwe those who engage in the trading of bitcoin say that it provides them with rare protection since their bank deposits are in daily danger of losing value. There are also those who use the virtual currency to make online purchases or to send money to family members who are studying in educational institutions outside the country.

After the ban was announced one of the country?s trading platforms for digital currencies the price of bitcoin was indicated as $12,400 compared to the rest of the world where the price was below $9,000.

Unlicensed exchanges

According to John Mangudya, the governor of Reserve Bank of Zimbabwe, no one has been granted the license by the central bank to engage in the trading of digital currencies and therefore the law did not protect investors and dealers.

?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. The nature of cryptocurrency transactions make them the currency of choice for money launderers and other criminals,? said Mangudya.

According to an industry insider he move by the Reserve Bank of Zimbabwe would have an impact on settlements between exchanges though there would be no impact on sales amongst individuals.

P2P transactions

Last year in December there were reports indicating that the Reserve Bank of Zimbabwe had determined that the use of virtual currencies to make payments was illegal. At the time the Zimbabwean central bank warned investors in the digital currencies that if they lost their money they would have no legal recourse.

Additionally the Reserve Bank of Zimbabwe at the time also indicated that it was studying the use of cryptocurrencies with a view to figuring out their potential risks in the financial ecosystem. It was understood then that the Zimbabwean central bank was maintaining an open mind with the possibility of enacting some form of bitcoin regulation with a view to possible legalization.

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