Cryptogem Global Opens Exchange In Zimbabwe Despite Ban
Despite the ban imposed on digital currencies by the Reserve Bank of Zimbabwe, the Cryptogem Global crypto exchange platform has set up in the country’s capital, Harare. The Cryptogem trading platform exclusively deals with Bitcoin transactions.
Talking to news.bitcoin.com, Cryptogem Global CEO and co-founder said that the platform allows for the easy conversion of fiat and electronica money into Bitcoin and vice versa. She added that Cryptogem exchange is open to users from all over the world. In due course, the exchange plans to expand its scope to cover the whole world. This would then enable Zimbabweans to purchase goods and services from overseas countries using cryptocurrency.
Initially, the crypto space in Zimbabwe was challenged by the lack of a clear regulatory framework. However, the Reserve Bank of Zimbabwe imposed a ban on digital currencies earlier this year, leading to the closure of major crypto exchanges in the nation. As a result, crypto enthusiasts have had to seek alternative platforms to perform Bitcoin trades. Most of these alternatives lack proper security infrastructure and fraudsters have been capitalizing on this shortcoming.
From a legal perspective, the Zimbabwean central bank does not have the authority to prohibit cryptocurrency trading. This means that the central bank has no power to close crypto trading platforms. In fact, the bank had previously tried to close the Golix cryptocurrency exchange but their efforts were thwarted by the country's High Court. In his ruling, the justice said that the governor of the Reserve Bank had no mandate over the cryptocurrency industry.
Nevertheless, the bank was determined to ensure that the exchanges are not in business. In this regard, they ordered commercial banks in which the platforms stored funds to close the respective accounts belonging to the exchanges. Due to the lack of funds, the platforms had to eventually shut down. That marked the end of cryptocurrency exchanges in Zimbabwe.
Bearing in mind the fate of their predecessors, Cryptogem Global exchange has not opened accounts with Zimbabwean commercial banks. This means that the Reserve Bank cannot stop their operations. To this end, Mwale affirmed that the company does not have accounts because they do not deal with traditional paper currencies. So far, Cryptogem has traded over $2,000 worth of BTC and has approximately 300 members.
There is hope, however, for the crypto space in Zimbabwe. The country’s new minister of finance, Mthuli Ncube, is a huge fan of digital currencies and blockchain technology. He has previously been quoted saying that the country should allocate more resources to learning about crypto assets and blockchain. Ncube also noted that central banks tend to be excessively conservative when it comes to adopting emerging technologies.
How Cryptogem Works
As expected, traders on Cryptogem must first make a deposit before trading. Once this is done, they wait for a buyer to match their selling price. After agreeing on terms, Cryptogem automatically transfers the involved Bitcoin to an escrow account until the seller confirms the receipt of the agreed payment. Atypical transaction on Cryptogem should be complete within a few minutes.
Notably, the value of Bitcoin on Cryptogem is three times as much as its standard rice. Apparently, the pricing is based on the dollar rates in the American black market.
Regarding security, Mwale confirmed that Cryptogem will protect the user accounts using multi-factor authentication mechanisms. Also, the exchange will store a majority of the funds in hardware wallets to reduce their vulnerability to attacks. Only a small portion will be left online to marinating liquidity on the platform. Lastly, the server information is obscured using solutions developed by a reputable cybersecurity firm.