News

Zimbabwe’s High Court Suspends Directive Banning Cryptocurrency Trading

0 Comments

Zimbabwe’s high court has suspended a central bank’s directive banning cryptocurrency trading in the country. This after the Reserve Bank of Zimbabwe failed to show up for a case that was filed by Golix, a cryptocurrency exchange platform.

The judge gave the default ruling after the respondents, the RBZ and the governor of the central bank failed to make an appearance, TechZim reports.

Cryptocurrency

In the application, Golix had argued that the central bank did not have the powers to give the directive as it amounted to law-making, a function that can only be performed by the legislature.

“The Respondents are in fact purporting to classify the trade in cryptocurrency as illegal,” the application had said.

The May 14 directive banned all banks from facilitating cryptocurrency related transactions and gave them 60 days to wind up existing arrangements. In the letter the RBZ asked the exchange to take “steps to close the cryptocurrency accounts or ‘wallets’ of your customers and to make good any funds currently held on behalf of customers” trading and investing virtual currencies.”

The RBZ sent a letter a day later ordering Golix to suspend its operations. The platform took down the order book as result. Trading has not resumed as at the time of this writing.

In a statement, the RBZ had raised concerns that the cryptocurrencies could be used to bypass exchange controls and for money laundering.  Cryptocurrencies also posed a risk to financial stability, the regulator had said.

Cryptocurrencies have become increasingly popular in Zimbabwe whose currency the Zimbabwean dollar is facing sustained inflationary pressure. Bitcoin trades at a premium as citizens turn to virtual currencies to cushion themselves. Cryptocurrencies are also used to make remittances.

Golix had said it would seek to amicably resolve the issue with RBZ immediately after the ban was announced.

Leave a Reply

avatar
  Subscribe  
Notify of
close-link

Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks.

CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk.

When trading in stocks your capital is at risk.

Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Some links are affiliate links. For more information please read our full risk warning and disclaimer.