22 December 2017

Zimbabwe: Zim Central Bank Warns Against Use of Bitcoin

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Bitcoin

Harare — The Reserve Bank of Zimbabwe (RBZ) on Thursday warned the public against the use of virtual currencies such as Bitcoin because of the risks involved.

In a statement, RBZ governor John Mangudya noted that the use of virtual currencies or cryptocurrencies was on the increase both locally and globally, with Bitcoin being the most popular.

He warned that the use of and trading in such currencies was not regulated by the country's laws and presented 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, any regulatory authority," he said.

Mangudya said virtual currency was defined as a digital representation of value that could be digitally traded and functioned as a medium of exchange or a unit of account or a store of value but did not have legal tender status.

"Virtual currency is different from fiat currency (also known as real currency, real money or national currency) which is the coin or paper money of a country that is designated as its legal tender. Virtual currency is also not the same as e-money, which is used to electronically represent and transfer value denominated in fiat currency," he said.

He said virtual currencies were attractive to money launderers and other criminals because of the supposed anonymity and ease with which transactions could be conducted -- on the internet and across borders.

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