Cryptocurrency enthusiasts in Zimbabwe are breathing a sigh of relief after the country’s Supreme Court issued a temporary order lift a ban on cryptocurrencies that had earlier been imposed by the Reserve Bank of Zimbabwe (RBZ).
In its directive, the RBZ issued a directive prohibiting all financial institutions in the country from transaction or trading in digital currencies. The Central Bank said it took the moves so as to preserve the stability and integrity of the country’s financial system. In the directive, financial institutions were given 60 days to liquidate as well as restitute existing account balances. They were directed to exit any relationships with digital currency exchanges within the given period.
To be specific, banks and financial institutions were prohibited from registering, maintaining accounts, collateral arrangements, clearing, giving loans, and remittance as well as payment and settlement accounts using virtual tokens.
The central bank also directed financial institutions to desist from opening accounts of exchanges that deal in cryptocurrencies and accepting cryptocurrencies as collateral for loans.
A directive to Bitfinance to close down business
In a similar fashion meant to discourage crypto activities in the country, the Reserve Bank of Zimbabwe ordered Bitfinance (Private) Limited to close down its crypto business. Bitfinance, which operates under the name Golix filed a petition at the High Court through its lawyers Mutandiro Chitsanga & Chitima Legal Practitioners to challenge the directive. In the petition, the company argued that the order was against the constitution as well as the administrative law.
In his ruling, Justice Alfas Chitakunye of the Supreme Court issued a temporary order lifting the ban by the central bank. This paves the way for digital currency operators in the country to continue doing business.
Difficulty in fully implementing the RBZ directive
Some players in the crypto industry had poked holes in the directive saying that was hardtop fully to implement it. According to many, the ban could not affect businesses between exchanges. This is because digital currencies can be traded peer-to-peer and does not necessarily need a third party. In essence, the ban only removed commercial banks and other financial institutions from the equation but did not prohibit crypto business in the country.