The alarming increase in virtual currency transactions or cryptocurrencies worldwide is a serious crime. In a statement, The Reserve Bank Of Zimbabwe (RBZ) governor, Dr John Mangudya warned all those who are investing in cryptocurrencies such as bitcoin, saying those engaging in virtual currency transactions will not have legal protection or recourse in the event that they lost their hard earned money. He said digital currencies are normally associated with money laundering and terrorism financing since they allow individuals to transact without their identity being known over the internet hence pose a series threat to the nation. Dr Mangudya also elaborated that, Bitcoins and other digital currencies do not have legal tender status in Zimbabwe and those engaged in such transactions are not protected by the current regulation.
In his statement, Dr Mangudya said the use of virtual currencies such as bitcoin is a global crisis as “there are entities that are facilitating the purchase and sale of virtual currencies in and outside Zimbabwe. There are many virtual currencies in circulation, with Bitcoin being one of the most popular.”
“The Reserve Bank of Zimbabwe wishes to advise members of the public that the use of and trading in cryptocurrencies or virtual currencies are not regulated by the country’s laws and presents risks such as money laundering, terrorism financing, tax evasion and fraud. Under the existing legal and regulatory dispensation, any person who invests in virtual currencies or participates in any transaction involving virtual currencies does so at own risk and will not have legal protection from, or recourse against, and regulatory authority,” he added.
However despite such kind of criticism from some central banks and many governments around the globe banning bitcoins and other cryptocurrencies for facilitating money laundering and unauthorised financing, Blockchain chief executive Peter Smith, whose company provides technology to secure cryptocurrencies, believes that the total value of all cryptocurrencies in the world will hit $1 trillion in 2018 and central banks will hold cryptocurrency in reserve, alongside gold and foreign currencies.
Virtual currencies are neither regulated nor issued by the public authority and are without any state guarantee. Nonetheless, there is widespread use of virtual currencies around the globe, which has seen the emergence of bitcoin exchanges, the local exchange, Golix. On the global market bitcoin is trading at $16,299 while on Golix, Zimbabwe’s bitcoin exchange, the digital currency is trading at $29,500.