Central Bank of Zimbabwe States that Bitcoin Isn’t Legal

Over the last few weeks, there has been plenty of news on the status of Bitcoin in Zimbabwe, considering the fact that the digital currency surged to nearly $15,000 among local exchanges.

In a recent report, the Reserve Bank of Zimbabwe stated that neither the trading nor the use of bitcoin for transactions, have been legalized in the country, despite the surge in value for the coin.

At this time, a single digital currency exchange operates in the region. Therefore, the trading activity of Golix surged up to $1 million in the month of November. Additionally, this week, on Tuesday, the price for the coin surged to roughly $14,490. This makes Zimbabwe a particularly interesting case to study, considering that the worldwide average of the coin is situated at around $8,000, with the highest price being registered here.

In a recent statement by the country’s central bank, it was mentioned that: “In terms of the bitcoins, as far as we are concerned, it’s not actually legal. In Southern Africa, what we have done as regulators, we have said that we will not allow this in our markets. Research is currently on, being undertaken to ascertain the challenges and risks associated with these particular products.”

Therefore, it seems like bitcoin will not be officially legalized in the region until the bank comes up with a regulatory framework for it. Regardless of this aspect, exchanges are free to operate in the region. However, the director and registrar of banking institutions, Normal Mataruka, mentioned that the exchange will have to verify the identity of traders, especially when dealing with high value transactions.

At this time, bitcoin is mostly used to send money out of the country, or to buy services from merchants who accept the digital currency as a means of payment. It is however important to point out, that not many merchants have adopted it so far, with users being unable to make payments for local services or goods.

Because of the low production capabilities of the country, Zimbabwe has suffered numerous foreign currency shortages alongside with liquidity challenges over the last few years. Additionally, the country is also well-known for its high inflation rate, clearly seen in the trillion dollar notes.