Zimbabwe Ends Bitcoin and Crypto Trading Amid Cash Crisis

Zimbabwe’s central bank, RBZ, has prohibited financial institutions from facilitating any banking services for Bitcoin or cryptocurrencies. Explicitly, financial institutions must “ensure that they do not use, trade, hold and/or transact in any way in virtual currencies.”

The circular, issued on May 11, goes on to state that banking services include 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 the purchase or sale of virtual currencies.

The statement explains that as the “custodian of public trust” the Reserve Bank of Zimbabwe is obligated to safeguard the integrity of Zimbabwe’s payment system, linking cryptocurrencies to criminal activities, including money laundering.

Financial institutions have until July 10 to terminate their relationships with all cryptocurrency exchanges.

Zimbabwe’s cash shortage has worsened over the past two years, with locals watching the value of their bank accounts shrink on a daily basis. The situation accelerated interest and investment in Bitcoin as protection against the country’s hyperinflation and financial woes.

Days after the RBZ issued its clampdown on Bitcoin and cryptocurrencies, the UK announced an infusion of $100 million to Zimbabwean companies, according to The Financial Times. The loans will be made via Standard Chartered Bank and are slated to be the UK’s first direct commercial loans to Zimbabwe’s cash-strapped private sector in over 20 years.

Image via Baynham Goredema/Flickr

 

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