It may seem like all we are talking about is the Reserve Bank of Zimbabwe’s (RBZ) ban on cryptocurrency trading lately. I believe we have good reason to do that. That kind of decision making by the RBZ needs to be nipped in the bud.
This is not necessarily because we believe in cryptocurrencies but rather in innovation and new technologies. We cannot outlaw technologies simply because we do not understand them. The RBZ wants other countries to come up with their own regulation so that we can copy. We cannot condone the follower mentality, it has not served us well thus far.
For one, those countries we intend to copy do not have identical circumstances to our own. Consider that we have a weak economy, importing more than we export. We do not have a currency of our own but depend on the USD, the Rand and the hybrid and ridiculous Bond Note. We have a massive number of Zimbabweans living outside the country remitting millions every year.
Do we really expect countries that do not relate to the above come up with solutions that are ideal for an economy like ours? After all, how many countries are as ‘open for business’ as we are?
We are not alone in banning cryptocurrencies but we might be alone when it comes to the reason why. It might be revealing to see which countries we have as company in the ‘ban cryptocurrencies’ boat.
Cryptocurrency legality around the world (for 251 countries):
- Legal – 30.89%
- Neutral – 9.35%
- Illegal – 3.66%
- Restricted – 2.85%
- There is no information on the other 53.25%
Notable countries in which cryptos are illegal: Algeria, Morocco, Pakistan, Vietnam, Afghanistan, Ecuador, Bangladesh and Qatar. Of these countries, more than half are Muslim nations and cryptos are banned for religious reasons. Ecuador on the other hand banned cryptos so that the government could issue its own cryptocurrency.
Notable countries where cryptocurrencies are restricted: China, Egypt, Saudi Arabia, Iran and Indonesia. In India the government discourages cryptos but there is no law against them, much like it was in Zimbabwe before the recent RBZ directive.
The countries listed above are not known for being innovative. Most of them, like Zimbabwe, are poor countries. Saddled with under-performing economies they fight anything that has any semblance of taking power from central authorities like cryptocurrencies do thanks to their decentralized nature.
This hardly works. In Morocco and Vietnam where they are illegal, trade in cryptocurrencies is thriving. It is all done in contravention of state laws and the people are more vulnerable to scammers in such situations. Bans like these breed black markets, history shows.
Considering the above it would not be irresponsible to predict that Zimbabweans will continue to trade in cryptocurrencies despite the RBZ’s directive, they will find a way. In the end the RBZ would only have worked to make it easier for people to be scammed. So much for being protector of the people.
While I don’t agree with those countries banning cryptocurrencies, they at least have reasons you can nod your head at and sigh, ‘I guess.’ In Zimbabwe’s case it all comes from not understanding something and rather than working on your own solution, waiting for others to spoon feed you the solution.
In response to the RBZ’s directive, some companies affected by it have announced that they will be looking to relocate to other countries, with some mentioning Zambia. We have seen this before. A certain successful farmer relocated from Zimbabwe to Zambia following some changes in law here. Within a few years Zimbabwe was importing maize from Zambia.
I guess Zimbabwe is only open to business if the businesses do not try to innovate too much.
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13 comments
How can you compare farming and tried and tested thing to bitcoin… Servicer was the farmer given funding from the government… Was his inputs subsidized. Was he given land for free… Not the same my friend… On the issue of scammers how were the public protected when initial the rbz did not make it illegal but said ppl were to do it at their own risk… What’s the difference… If you don’t understand something or we not too sure then a wait and see approach is safer… And obviously I don’t approve of most of the banks decisions but really just waiting is getting your goat… If golix is so great then they can make the same success in another country or is the premium that everyone was enjoying…ppl are not trading in it they just using it to get rid of RTGS and so on… Hence the premium… What you should be taking about us invest and Blockchain not protect the interests of a single company that is basically sunk… Time to move in to the next thing
We are not comparing farming to bitcoin. We are comparing the dramatic and drastic changes in regulation that drive business away from Zimbabwe. It is especially worrying that we can change rules overnight when we are screaming to the world that we are open for business. If you were a businessperson looking to invest in Zimbabwe, you would not be comfortable with the way we approach new regulation. On minute it’s, ‘you can do that, it’s fine,’ the next it is, ‘shut it down right now.’
THIS IS NOT ABOUT GOLIX OR CRYPTOCURRENCIES. It is about regulation versus promoting business.
True brothers and sisters. This so called for government is so old. Other countries are moving forward and Zimbabwe is moving backwards. We need change and yet they claim they want us investors to come on board. We will never do that. This government can’t even focus on it’s own money and they are still shutting down investors choice of money. How can they ligalise dagga and ban cryptocurrency. Investors let’s boycott zimbabwe” businesses and dagga destroy their minds!!!!!!!!!!!!!
Yep these authorities, am
amazed and disappointed to say the least. Back in 2012 I even
suggested that as Zimbabwe we should use Bitcoin for our
exports but the reason why that can’t happen as usual has
come out and mostly being ignorant.
Sorry to my folks but as Zimbos I know this is just a challenge
we can overstep in a bit.
Have just published my special report on Bitcoin and
Cryptocurrencies, hope if the governer also reads it he will
then reverse his decision.
You can get it from my blog at bitcryptoguide.blogpost.com or
simply go to my Twitter @Bitcoinguide2
It is sad Thomas. Will definitely check out your report.
The comments in favour of this draconian and uninformed move by the RBZ amaze me. Do people in this country really believe that the RBZ has their interests at heart, and it is out of concern for the citizens that they are doing this? If so, it would be the first thing they have ever done with the citizens’ best interests at heart.
It amazes me as well Ryan. There is nothing noble about the RBZ’s decision. It is not to protect the public. We cannot be naive as to believe every justification made by any organisation without questioning the logic. This applies to private companies as well. Those guys have well trained PR people who can put a spin on any decision to make it more palatable to the public. Even Mugabe had nice sounding explanations for his ridiculous decisions, talking about protecting sovereignty etc.
Ecuador banned crypto to introduce it’s its own thereby losingnyhe core principles of crypto. turns out kusanzwisiaa is not only in Zimbabwe
In some cases I think they do understand the technology but are so hell bent on profiteering from it they turn silly. Venezuela seems to have a basic understanding but thought they could rig the system.
We have been sending about 2k to Zim per month through Bitcoin for an art project (simukai.art). This morning I got confirmation for golix that their accounts are already frozen, so no more USD withdrawals. Looks like that will put an end to our project and reduce much-needed income for 8 artists.
Some of us since 2015 we have been transacting in bitcoin directly to each other. Its a matter of knowing who wants to buy.
That’s the thing Sammy. If you were trading way back in 2015, you caught wind of cryptos earlier than most people. That says you know what you are doing and have built a list of connections over the years. For those that hopped on board following the crazy run of late 2017, they are at risk. Looking to deal directly with strangers leaves them open to scammers. Explains why most have just decided to liquidate their cryptos.
You and many more people and businesses were affected and I just find it crazy that some believed the RBZ when it said its directive was meant to protect the public. No one asked to be protected from independence.