RBZ digs in on cryptocurrency ban

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has defended the central bank's decision to ban cryptocurrency transactions and accused a local dealer of exposing the country, money-laundering, evasion of foreign currency exchange controls and violation terrorism financing.

Bitfinance (Pvt) Ltd, trading as Golix, is challenging the recent RBZ ban at the High Court.

In their opposing affidavits filed on Friday, the RBZ and Mangudya argued that the Bitfinance system, which they said was unregulated and illegal, could be abused by criminals to conduct illicit transactions with no chance of tracking them.

Mangudya said the decision to initially ban cryptocurrency transactions as well as the operations of Golix in the country was supported by the Banking Act, which gives the central bank the powers to supervise banks.

"…and prescribes a variety of supervisory actions that the bank may take as a measure to correct any conduct that may be a threat to the smooth operation of the banking and financial sectors," RBZ and Mangudya's responses read.

"It is as a result that the bank (RBZ) directed banks not to deal with the applicant (Bitfinance (Pvt) Ltd) as the latter's activities were not only unregulated and illegal, but presented all kinds of risk, including but not limited to fraud, money-laundering, evasion of the country's exchange.