The RBZ decided that they would wash their hands when it comes to cryptos. The central bank sent a directive to banks instructing them to cut all their ties with crypto exchanges and this may have grave consequences in the long run. As a nation, we had a serious opportunity to adopt a technology whilst it was still in its infancy but judging from the RBZ’s position it seems there won’t be any of that going forward.
The domino effect that could come as a result of this directive could be heartbreaking to watch as we’ll see other nations benefit from ideas that we had gotten a front row ticket.
Golix Going To SA…
Golix recently announced they would be opening an office in SA. I don’t think the decision to move into new territory was motivated by the RBZs stance (Golix probably had no idea this was going to be the Central Bank’s stance) but now that this is the case there could be serious motivation for them to just relocate and move their project out of Zim.
VFC to Zambia?
A few months ago we talked about Vic Falls Coin, and these guys were trying to come up with a token that would be used within the Vic Falls Community –on both the Zim and Zambian side- but now that things are getting sticky in Zimbabwe, it might end up just being done on the Zambian side. Regardless of whether the project succeeds or fails there are lessons to be learnt and by being a part of these things we would have had so much more perspective, but it seems the central bank wants no part in any of that.
What happens to Wala?
As recently as last week there were developments on the crypto front, as the Dala Foundation was bringing their wallet app Wala and the crypto (Dala), which is managed in that app, to Zimbabwe. Dala has apparently been gaining traction in Uganda and has now been launched in Zimbabwe and SA. Now with banks being given the directive to stop facilitating the payments of anyone who is dealing in cryptos it will make it very difficult for the Dala foundation to stay in Zimbabwe in the face of a resistant authority.
Agribank had led the banking sector
Agribank was the first bank in Zimbabwe to have any cryptocurrency or blockchain related activity. They partnered with the bitcoin remittance company, Bitmari to offer blockchain supported remittance service for diaspora remittances. Now of course Agribank has to terminate that relationship and Bitmari really is left in the cold.
Bitmari also ran a pilot with farmers trying to solve financing issues using blockchain. Now, dololo…
…. And Goldchip?
We also talked about the mining company that was in the process of an ICO. After buying their token Goldchip would give out 5% of the Goldchip Investments profits for each respective quarter. Their ICO was supposed to start in early June but now there is a possibility that the public might actually not be too enthused to invest in something that the authorities are distancing themselves from.
A missed opportunity
All these projects were not going to be guaranteed successes BUT they would have afforded us (Zimbabweans) the opportunity to learn more about this technology and an opportunity to learn what is viable and what isn’t. Now that the RBZ has taken this definite stance, there is little scope for growth.
The fact that so many companies were attempting to get into this technology from here was an advantage and now that this directive will dissuade any new innovators with ideas based on Cryptos from coming into the country. This is a scenario where we could have been leaders in Africa, or at least somewhere close to the top but now if crypto really is indeed the next big thing we are going to be trailing other countries that have less rigid outlooks on virtual currencies.
Zimbabwe has already become a digital economy (due to circumstances and NOT by design) so adoption of virtual currencies is something that people would have bought into and would have been willing to be educated upon if need be. It’s baffling that the country would go down this route in a country where a majority of the population would not be horrified at the idea of a virtual currency to begin with.
Are we really open for business?
At a time where the national mantra has been “Zimbabwe is open for business”, this is a very rigid move that contradicts that whole motto. As indicated in an earlier article, the better and more careful way of dealing with this would have been by trying to gain an understanding and then trying to find a way to regulate these currencies. Being on the extreme side in any situation is never really a good idea.
Yes the RBZ was right to have concerns and I don’t think they should have thrown all caution to the wind and embraced Cryptos recklessly but I also don’t think they should have gone for an outright ban.