The High Court of Zimbabwe has lifted a ban on cryptocurrencies in the Southern African country. This follows a lawsuit that was filed by a local cryptocurrency exchange which argued that the Reserve Bank of Zimbabwe did not have any authority to declare cryptocurrencies illegal.
On the 12th of May, Zimbabwe’s financial services regulator, the Reserve Bank of Zimbabwe (RBZ), issued a directive to all financial institutions to stop all forms of transactions related to cryptocurrencies and to wind down all accounts tied to cryptocurrencies within 60 days. This was followed a few days later by an order to all cryptocurrency exchanges in the country to shut down their operations.
Zimbabwe’s largest cryptocurrency exchange, Golix, submitted an urgent High Court challenge contesting the RBZ’s actions. Through its lawyers, Golix argued that, as a regulator, the RBZ was not authorized to place any prohibition on cryptocurrencies.
Despite Zimbabweans’ significant interest in virtual currencies, they are not recognized as official, legal tender in the country, and there has also been no legal and regulatory framework set up for cryptocurrencies. The suit filed against the RBZ’s decision also challenged the regulator’s failure to give adequate time for notice and a right of response for when it issued its ban.
VICTORY FOR THE CRYPTOCURRENCY SPACE
According to reports, the High Court gave a default judgment in the case after the Reserve Bank of Zimbabwe failed to turn up to defend themselves. The decision suspends the ban and will allow Golix and other cryptocurrency exchanges to resume operations. It also allows businesses dealing in cryptocurrencies to maintain bank accounts.
The victory will likely bolster Zimbabweans’ confidence in the country’s cryptocurrency space, which already enjoys a notable amount of activity.
A shortage of foreign currency and reduced confidence in the formal banking system have made cryptocurrencies a reliable way to meet international financial obligations and an alternative store of value. As such, the court victory will be celebrated by everyone in the cryptocurrency space.