Zimbabwe urged to legalise use of crypto-currencies

GOVERNMENT should consider legalising and regulating the use of crypto-currencies so as to benefit from tax collections and minimise financial crimes such as money laundering.

This was said by professional accountants who attended the Association of Certified Chartered Accountants (ACCA) meeting which ended in Victoria Falls on Sunday.

A crypto-currency is a digital currency used as a medium of exchange in which encryption techniques are used to regulate generation of units of currency and verify the transfer of funds operating independently of a central bank.

The Reserve Bank of Zimbabwe (RBZ) early this year banned crypto-currencies and ordered banks to comply with the directive. The country's financial services sector is not allowed to work with crypto-currency exchanges or hold any accounts of people trading in cryptos.

However, the crypto-currency has remained uncontrolled in Zimbabwe after the High Court in May overturned the central bank ban on Bitfinance Private Limited, operating as Golix, to trade in the country. Speaking during a panel discussion following a presentation by the founder of Westcase Consultants, Mr Mkhululi Ndlovu, about digital disruptions-crypto-currency and block chain, participants said Government would not be able to control crypto-currencies unless it legalises them.

"The crypto-currency is now worth millions of dollars but the question is whether Treasury is benefitting from it," said a participant.

Another participant weighed in: "One of the concerns by the regulator is that crypto currencies are anonymous and therefore prone to money laundering and not auditable.

Tax-authorities are not benefitting from crypto-currencies and that's why some countries are legalising them so that they can take part. As long as regulators resist, the anonymity of Bitcoin makes it susceptible to crime."

Participants said Government should allow use of block chains, especially now that the country also uses the plastic money payment system.

"RBZ rejected the crypto-currency saying it wasn't good for Zimbabwe especially buying with something which one has no control over. The fear was that the Crypto-currency encourages money laundering, but the question is does it?"

Mr Ndlovu said the role of Government as an authority was to monitor usage and regulate where possible.

"There is nothing wrong with professionals embracing crypto-currencies. What matters is your values as professionals as long as you use the crypto-currency for legal purposes like paying fees without engaging in corrupt or criminal activities. What we need is proper infrastructure," he said.

Some of the world crypto-currency companies include Styx24 and Bitcoin. Bitclub Network runs one of the world's largest Bitcoin mining operations.

A few months ago, the network encouraged tourism players to embrace crypto-currencies, which are being used by the tourism international market. The currency entails one becoming a member of the network before buying Bitcoins or mining machines, which will start earning money.