Zimbabwe government has banned all mobile money platforms in the country in an attempt to recover the falling local fiat currency Zimbabwe dollar.
Friday’s decision might cripple the already struggling economy of the country as around 80 percent of the transactions in the country were done on mobile money platforms due to the shortage of banknotes.
The country is also battling with escalating inflation, which led to the adoption of the US dollar under the regime of the former leader Robert Mugabe. However, last year the current President Emmerson Mnangagwa’s administration banned the use of foreign currency in Zimbabwe and introduced Zimbabwe dollar again.
“Government is in possession of impeccable intelligence which constitutes a prima facie case whereby the phone-based mobile money systems of Zimbabwe are conspiring, with the help of the Zimbabwe Stock Exchange, either deliberately or inadvertently, in illicit activities that are sabotaging the economy,” government spokesman Nick Mangwana sain in a statement.
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Trying to revive a scrapped fiat
With the scrapped local fiat, many mobile money companies emerged in the country, and the government was keenly watching the growth in the sector that was becoming a roadblock on the reintroduction of the local fiat.
EcoCash, a major mobile money platform that was earlier accused of fanning the rapid spike in the street exchange rate of the Zimdollar versus the US dollar, defied the government’s order on the suspension of such platforms.
“We urge all Ecocash users…the majority of whom do not have bank accounts, to remain calm and continue to do your lawful transactions as usual,” the company stated.
EcoCash also raised questions on the authority of the government, saying that the orders regarding the payments industry should come from the central bank.
The Zimbabwe central bank, earlier this year, revealed that taking steps to regulate the digital currency industry, taking a U-turn from its previous hostile stance, however, with the recent government’s position against mobile money has put up a question on the move.