Zimbabwe central bank bans cryptocurrencies

Zimbabwean President Emmerson Mnangagwa
Zimbabwean President Emmerson Mnangagwa.

Zimbabwe’s central bank has banned cryptocurrency trading and processing, its governor has said.

The Reserve Bank of Zimbabwe bank has given financial institutions, including local banks, 60 days to end their existing relationships with virtual currency exchanges.

The governor John Mangudya said in a statement: “The Reserve Bank has directed all banking institutions not to provide banking services to facilitate any person or entity dealing with or settling virtual currencies.

“The nature of cryptocurrency transaction make them the currency of choice for money launderers and other criminals.”

Iran also announced last month that it had banned its domestic banks from dealing in cryptocurrencies due to money-laundering concerns.

China launched a crack-down on cryptocurrencies in September 2017, with its authorities banning bitcoin trading and initial coin offerings.

The official statement by the Zimbabwe bank said its attention “is once again drawn to the risks” involved with virtual currencies and “the need to ensure strict adherence to sound risk management”.

It said: “Financial regulators around the world have identified the dangers and risks presented by virtual currencies to financial stability, which include risk of loss due to price volatility, theft or fraud, money laundering and other criminal activities.

“Further, cryptocurrencies can be used to facilitate tax evasion as well as externalisation of funds in violation of a country’s laws.”