The Reserve Bank of Zimbabwe has issued a directive to the largest crypto exchange of the country, Golix exchange to cease all its operations, in whose response the exchange has taken the bank to the High court. In the past few months, similar incidents have happened in Chile and India.
Golix exchange ordered to cease its operations by reserve bank of Zimbabwe
Last week, the Reserve Bank of Zimbabwe (RBZ) banned all the financial institutions in the country from dealing with cryptocurrencies. Also, a circular has been sent by the bank that prohibits all of these institutions from working with individuals and businesses that deals in cryptocurrencies.
Last week itself, the central bank sent a directive to the Golix exchange, which is the largest cryptocurrency exchange of the country instructing them to cease all of their operations.
According to the local media sources, before sending the directive, RBZ also ordered the banks not to associate with Golix exchange by using the strongest of terms to warn from associating with cryptos.
At that time, a communique was also signed by the governor of the bank, Dr. John Mangudya, who gave the warning:
“The Reserve Bank will continue to closely monitor regional and global cryptocurrency developments in order to inform policy direction.”
RBZ gave about 60 days to banks to sever their ties with cryptocurrencies but looks like central bank is already trying to resolve this as soon as possible.
Founded in December 2014 by Tawanda Kembo and Verengai Mabika, Golix was initially called BitFinance and Bitcoin Fundi was the name of its exchange.
Golix takes central bank to the high court
In response to the directive to shut down the operations, Golix has taken the RBZ to the High Court.
In its application, Golix questions if RBZ has the appropriate authority to declare cryptocurrencies illegal. The exchange further argues that by declaring cryptos illegal, RBZ is usurping the power of Parliament.
A part of the application reads:
“I submit that the ban in effect outlaws and classifies as illegal Applicant’s operations. The Respondents are in fact purporting to classify the trade in cryptocurrency as illegal. That will amount to law-making, a function that belongs to the legislature and not the Respondents. Respondents are thus clandestinely usurping Parliament’s law-making powers.”
Golix states that the central bank didn’t give a “reasonable notice and right of response” by issuing the directive. The exchange further argued that RBZ acted unconstitutionally, citing section 68 of the constitution.
Similarly, in India, after the central bank of the country issued a circular to ban crypto trading, crypto companies took the bank to High Court which has now moved to Supreme Court where the bank has upheld the ban until the hearing.
Also, in April, Chilean crypto exchanges went to court to fight the banks where the court ordered the banks of the country to reopen the accounts of crypto exchanges.
What are your views on the banks of several countries banning the crypto dealings? Share your thoughts with us!