In response to a suit filed by the Golix digital asset trading platform, the Reserve Bank of Zimbabwe recently filed opposing papers to the Zimbabwean High Court. The central bank argues that its directive to ban Golix from transacting with banks was lawful and should, therefore, be implemented.
The bank further claims that the integration of virtual assets transactions to the mainstream banking institutions presents a substantial risk to the country's financial operation. Moreover, Golix is neither registered nor monitored by the government; a factor further enhances the risks.
Through the filing papers, the central bank’s governor, John Mangudya explicitly states that Golix is not an accredited bank or financial institutions, yet it indulged in the provision of banking services. In this regard, John further explained that Golix also provides money transfer, ATM, banking, and cash transfer services, all of which demand registration and regulation. Nonetheless, the Reserve Bank acknowledges that there is an ongoing cryptocurrency boom worldwide. Regardless, the central bank says that the directive was issued upon the realization that Golix was partnering with banks to facilitate illegal and vulnerable financial transactions involving digital currencies, especially Bitcoin.
Refuting the allegations that their platform abets illegal cryptocurrency transactions, the Golix executive team stated that the exchange is compliant to the KYC protocol which prevents the usage of cryptos for illicit causes. In recent times, a severe foreign currency shortage has hit the Zimbabwean economy, prompting individuals to seek a different means to make online transactions such as money transfer and online shopping. Consequently, the usage of cryptocurrencies has risen rapidly, especially Bitcoin.
Despite the obvious potential benefits of introducing digital currencies, the Reserve Bank of Zimbabwe is adamant that such a move would initiate the proliferation of illegal activities. Specifically, it labels the upcoming Golix token crowdsale as a Ponzi scheme that is extremely risky. Concerning this matter, the governor stated that the bank was obliged to stop the ICO since it was a highly volatile project.
The opposing filing also claims that the reserve bank did not bar Golix for operating within Zimbabwe. Last month, Golix received a favorable and iconic ruling from the Zimbabwean High Court, allowing the platform to continue operation after the imposition of the directive by the local regulatory bank.
While Zimbabwe is working out how to regulate virtual currencies, neighboring South Africa has already made significant steps in that direction. Currently, the country is taxing income made through cryptocurrency investments. Furthermore, the nation is testing the applicability of distributed ledger technology in the banking systems.