Iran and India have already asked banks to stop dealing with companies conducting crypto activities. And now the Reserve Bank of Zimbabwe too has issued an order stopping all the banks in the country from allowing crypto trading. The new law was announced recently by the Governor, John Panonetsa Mangudya and the circular was issued by Norman Mataruka, the director and registrar of the banking institutions in Zimbabwe.
New Law Do Not Affect P2P Trading
As per the new ruling, all the financial institutions will have to terminate their association with the crypto exchanges and liquidate the accounts of these exchanges with immediate effect. The circular says that the banking institutions have been given a grace period of 60 days for completing the termination process. The circular mentions seven points that should be carried out for safeguarding the soundness and integrity of Zimbabwe’s financial system.
According to the order, all the financial institutions should, “ensure that they do not use, trade, hold and/or transact in any way in virtual currencies.” The circular mentions the risks and dangers of the digital currencies and how it can affect the financial stability of the country. It also says that crypto users may use it to evade taxes and violate the externalization of funds laws of the country.
As per the new regulation, even though the local banks will have restrictions when it comes to dealing with crypto-related transactions and payments, it will not affect the P2P trading. It means that the regulation of central bank does not in any way stop the local crypto exchanges from continuing their services.
Governor Warns Public To Use Cryptocurrency ‘At Their Own Risk’
The central bank governor has said that the public can continue crypto trading at their own risk and that any person who is involved in cryptocurrency transactions will have no recourse to any regulatory authority of Zimbabwe including the Reserve Bank.
It should be noted that the country demonetized its dollar in 2015 after declaring a period of hyperinflation. People in Zimbabwe now use currencies of other countries like South African rand, US dollar, Euro, Japanese Yen, & pound sterling and many consider Bitcoin to be a safe-haven asset.