The Reserve Bank of Zimbabwe has warned members of the public to trade in Bitcoin and other crypto-currencies at their own risk as the authority will not render them any legal protection in case they lose money through these virtual currencies.
The central bank warning comes on the back of increased uptake of crypto-currencies by Zimbabweans with the private sector joining the bandwagon in their quest to facilitate international payments and other transactions which are not regulated by the authorities.
These virtual currencies sometimes referred to as Crypto-currencies are controlled by the market forces rather than designated fiscals.
“Virtual currencies are not only unregulated but are also neither issued by public authority nor guaranteed by the State. In this regard virtual currencies are not in any way attached to notes and coins circulating in the country. Virtual currencies do not have legal tender status in Zimbabwe or in any jurisdiction in the world. Virtual currencies are attractive to money launderers and other criminals because of the supposed anonymity and ease with which transactions can be conducted, on the Internet and across borders.” read the statement from the RBZ website.
“The Reserve Bank of Zimbabwe wishes to advise members of the public that the use of and trading in crypto-currencies or virtual currencies is not regulated by the country’s laws and presents risks such as money laundering, terrorism financing, tax evasion and fraud,” noted RBZ Governor, Dr John Mangudya.
What is ‘Bitcoin’
According to Investopedia.com, bitcoin is a digital currency created in 2009. It follows the ideas set out in a white paper by the mysterious Satoshi Nakamoto, whose true identity has yet to be verified. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.
There are no physical bitcoins, only balances kept on a public ledger in the cloud, that – along with all Bitcoin transactions – is verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite its not being legal tender, Bitcoin charts high on popularity, and has triggered the launch of other virtual currencies collectively referred to as Altcoins.