Reserve Bank of Zimbabwe to test Blockchain Technology
The Governor of the Reserve Bank of Zimbabwe, John Mangudya announced that they are going to launch a study into blockchain technology and subsequently integrate it into their banking system. This came as a surprise after the bank banned the use of cryptocurrencies earlier this year and last year.
Mangudya said that this step towards blockchain is being taken to be at par with other countries such as China, USA and South Africa where banks use blockchain technology for their activities. He also added,
I did not say cryptocurrencies because it is lower than blockchain. Blockchain encompasses all the cryptocurrencies such as Bitcoin… and we are saying we are putting in motion studies, ways and means of investigating that blockchain technology.
Mangudya said that some of the concerns that the RBZ that in relation to cryptocurrency were in terms of its regulations and origins. He said
“If you are investing in virtual money, we want to know where it is being mined. In fact, cryptocurrencies are just like mobile money because you need a wallet where you deposit the cryptocurrency, but the issue is what is their source and how do they do it?”
These concerns can be seen as valid as cryptocurrency and blockchain technology is extremely complex and a proper understanding is necessary to fully implement it in an effective manner. There are both countries that are widely accepting the use of these technologies and those that aren’t. There are also successes and failures seen in the arena and therefore Zimbabwe’s cautious approach towards understanding the technology and then possibly integrating it in their banking system can be understood.
In November 2017, the RBZ had declared that the use of bitcoin was illegal in the country and in May 2018, they issued a circular prohibiting domestic financial institutions from dealing in cryptocurrencies. Any person who continued dealing in cryptocurrency would have to do it at their own risk. This also led to a legal battle between RBZ and Golix(a crypto exchange) that was ordered to shut down in the country. However, this decision to study blockchain technology comes as a ray of hope for the future of blockchain and cryptocurrency in Zimbabwe.
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