Zimbabwe Court Revokes Cryptocurrency Banking Ban
The Harare High Court just lifted a nationwide ban on cryptocurrencies after a decision earlier this year by the Reserve Bank of Zimbabwe (RBZ) to issue a directive instructing banks not to facilitate any cryptocurrency related transactions, while also strongly warning the public not to deal in cryptocurrencies.
Golix vs Reserve Bank of Zimbabwe
The RBZ had previously banned all cryptocurrency exchanges from operating within the country. Each active exchange was subsequently required to take all the necessary steps to close the cryptocurrency accounts or ‘wallets’ of customers and to distribute any outstanding capital currently held on behalf of customers who trade and invest in virtual currencies.
The biggest victim of this ban had been Bitfinance Limited, also known as Golix, the country’s first and largest crypto-exchange. The initial ban had sparked a legal battle in which Golix had taken RBZ to Harare High Court saying the bank’s decision was unconstitutional, as there are no laws that empower it to make such legislation.
Interestingly, RBZ actually failed to appear for court proceedings, prompting the High Court in Harare to issue a default ruling that essentially lifted the Zimbabwean central bank’s ban.
RBZ ban on cryptos lifted by the High Court. Administrative justice is alive and well in this jurisdiction. Section 68 of the Constitution is our best friend.🔥 pic.twitter.com/i8QKqb7xFB
— Fadzayi Mahere (@advocatemahere) May 24, 2018
What does it mean for Zimbabwe?
Zimbabwe is facing acute cash shortages, exacerbated by a foreign currency crunch. Cryptocurrencies have become a popular avenue for cross-border value transfer and value retention in the country, with some citizens using them as a foreign currency alternative while others employ them as a hedge against the instability that is tied to the country’s formal financial system.
Zimbabwe has had one of the worst economies in recent years, with a currency that has suffered from hyperinflation. With the adoption of cryptocurrencies, Zimbabwe citizens can now secure their funds against the ongoing economic troubles plaguing the nation. Additionally, these citizens can also better move their money via crypto, as there are a number of laws preventing large sum fiat transactions outside of the country. However, perhaps the most important element of Zimbabwe’s newfound cryptocurrency ownership is the opportunity for millions of unbanked individuals to gain access to more modern banking services.