In a positive and unexpected turn of events, the Governor of the central bank of Zimbabwe, John Mangudya, indicated that the Reserve Bank is ready to investigate blockchain technology. This is a surprise considering that the central bank banned cryptos back in May.
Speaking at the Alpha Media Holdings’ Banks and Banking breakfast meeting yesterday Mangudya said:
I did not say cryptocurrencies because it is lower than blockchain. Blockchain encompasses all the cryptocurrencies such as bitcoin and all the cryptocurrencies and we are saying we are putting in motion studies, ways and means of investigating that blockchain technology
Mangudya also expressed some of the concerns he has in relation to the technology:
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.
What we are against as I have always said is to do things which are not regulated because we need to know where these bitcoins are being mined and do want to hunt them. So while we want to embrace things, we need to know where they are coming from. If you embrace mobile banking platforms we know that there is a trust account.
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?
Mangudya’s points of concern are very valid and the fact of the matter is blockchain is a confusing technology and a lot of these questions are confusing even to people who have been constantly exploring the technology itself. Think of how many times cryptocurrency debates have boiled down to ‘What is Bitcoin?’ Simply because most people are yet to grasp how these virtual currencies work.
Some countries have fully embraced cryptocurrencies but think of South Korea where two exchanges got compromised; one exchange lost $37.2 million worth of coins and the other lost $30 million. The fact that these two incidents happened in a fortnight presents the risk that comes with embracing technology.
Maybe the calm and level headed approach being advocated for by the RBZ is the right path. Did they piss people off by banning cryptos overnight and shutting down Golix’s bank accounts before the 60 days they had promised? YES. Was this the best way to approach that situation? I certainly don’t think so but maybe investigating and learning will help the Reserve Bank and other players in the blockchain sector make more informed choices going forward. Time will tell.
Ray of hope…
I’m not sure if these statements mean that there is a chance the RBZ will revisit their position on cryptos but it seems this is the stance they are taking going forward. The Governor also indicated that they would be monitoring developments elsewhere before committing to a position, back in May. The RBZ seem to be taking a page out of India’s book as they too have banned cryptos.
Overall, I think it’s good that the central bank is actually exploring the possibilities with blockchain. The central bank in South Africa recently conducted a pilot project testing intra-bank payments using cryptocurrencies and it is these kind of developments that you would hope the RBZ can also test the waters before giving their position.
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