Zimbabwe’s biggest crypto-currency exchange Golix.com will now process cash withdrawals to EcoCash accounts within an hour, in changes that in the short term should see more efficiency when transacting.
Golix, which accounts for over 70 percent of Bitcoin trading in the country, has often faced criticism over delays in facilitating cash withdrawals. It took at least one working day for one to receive their money through the mobile money platform EcoCash after withdrawal.
Cash withdrawals to bank accounts still take as much time. They have taken much longer — as much as four days —especially if the withdrawal coincided with a weekend. Golix director of communications Nhlalwenhle Ngwenya told the Business Weekly that the exchange had adopted the EcoCash swipe facility, helping to speed up mobile money transfers across the platform.
More changes are in the pipeline, he said, particularly those aimed at making cash withdrawals to bank accounts a lot quicker.
“We are constantly engaging local banks to find out how transactions can be processed faster than the current 24 hour time-frame we are offering. The fruits of these efforts are expected to speed up payments,” Ngwenya said on March 27, by email.
“We already handle a limited number of withdrawals during weekends and have been exploring ways to expand our capacity to do this on a larger scale,” he added.
The Swipe into EcoCash facility allows users to move money from any Zimbabwean bank into their EcoCash wallet via swipe, as long as they are connected to the Steward Bank point of sale machine.
For the individual user, the daily EcoCash limit is $5 000. The limit for corporates is not clear, and unless it exceeded the individual limit, Golix cash withdrawals through the mobile money platform would be limited only to a handful each day. That’s considering the amount of money exchanging hands on the bourse everyday. In the 24 hours to Tuesday morning, the volume of Bitcoin traded averaged just over two, or about $24 000. It could be five days moving that much amount of money should $5 000 be the daily limit.
Faster and cheaper?
Cryptocurrencies have often prided themselves as the epitome of speed and affordability for financial transactions – a means that’s a lot smarter than those services offered by mainstream banks, proponents say.
So, it became somewhat of a misnomer that Golix was taking forever to facilitate cash withdrawals, moreso in view of how investors are keen to move funds in between assets to curb losses arising from the often highly volatile crypto markets. And that exchanges elsewhere, like Luno in South Africa, completed transfers within minutes.
Comparisons with the Zimbabwe Stock Exchange (ZSE), which is more stable but rather inefficient as far as settling payments is concerned, were inevitable — and expectedly ungenerous.
The ZSE has a T+3 settlement cycle. That means if you sale your shares today you are paid within 3 days. Usually three working days.
“(I am ) hoping that someday soon Golix becomes automated and deposits and withdrawals are instant or near instant,” complained one investor who preferred anonymity.
Another said: “I do understand that because of the nature of crypto, which is volatile, it is not good to hold money for more than 24 hours. There is need for continuous development on the Golix project.”
Golix has not tampered with the withdrawal fees, even with the faster payment speeds. Withdrawals to EcoCash cost one percent of the withdrawal amount, as before. Ngwenya, the Golix communications director, refused to say how much money had been processed through EcoCash since the change in withdrawal time-frames.
But hoped that “this positive sentiment (from investors) will actually go a long way in encouraging them to use the EcoCash platform for withdrawals.”