eBusiness Weekly
Jeffrey Gogo
A new woman-led peer-to-peer bitcoin (BTC) exchange was launched in Harare last week. Cryptogem Global allows Zimbabweans to buy and sell virtual currency from a decentralised platform, without the need of an intermediary such as banking institutions.
Co-founder and chief executive officer Melissa Mwale said: “Cryptogem Global is a . . . bitcoin trading platform where people around the globe can exchange their local currencies and e-monies to bitcoin.”
But how does a P2P trading platform work and why such an exchange?
Mwale explained: “If someone is selling BTC they make a deposit to their Cryptogem wallet and create an offer or an advertisement, stating in detail their form of payment as well as their terms and conditions.
“The buyer will then also have the choice to select which offer has the best terms for them.
Buyer sends money directly to the seller while the bitcoin is held in escrow. After the seller has received payment and is satisfied with payment they then select release bitcoin and the bitcoin are sent to the buyer’s Cryptogem wallet,” she said.
Mwale continued: “We wanted to provide a platform that is efficient and reliable and connecting everyone around the globe, hence not limiting trades to a particular country but widening the trading options.
“For example, someone in Zimbabwe can buy from someone in the UK using paypal, Skrill or Western Union.”
Cryptogem’s launch defies the ban on cryptocurrencies by the Reserve Bank of Zimbabwe in May.
Essentially, the RBZ has no power to shut down cryptocurrency exchanges, like it tried to do with Golix and Styx24. The law doesn’t allow them to do so.
So, instead, the apex bank shut the exchanges down by proxy, through commercial banks, over whom it yields full control. The central bank instructed banking institutions to cut ties with the two digital currency exchanges, virtually cutting off their air supply.
An earlier attempt by the Reserve Bank to shut down Golix was quashed by the High Court, which ruled that central bank governor John Mangudya did not have jurisdiction of operations in the local cryptosphere.
But Cryptogem does not have to concern itself with all such threats. The exchange does not have a bank account. “Cryptogem does not have any bank accounts in Zimbabwe,” Mwale said.
“There isn’t actually any need for a bank account at the present moment, though we are registered fully as a private limited company in Zimbabwe. We don’t work with banks directly as we do not handle any fiat and if you noticed the RBZ ban was mainly directed to using banking service by exchanges,” she added.
Unless the law changes, the Reserve Bank of Zimbabwe just can’t put its hands on Cryptogem Global. The new exchange will also draw inspiration from the open-mindedness demonstrated by new Finance Minister Mthuli Ncube towards digital assets.
“I think the attitude for Zimbabwe should be to invest in understanding innovations and often central banks are too slow in investing in these technologies,” said Professor Ncube, in an opinion article published widely in the local Press a few days before President Mnangagwa confirmed his appointment on September 7.
“But there are other countries which are moving faster,” he said then.
“If you look at the Swiss central bank they are investing in and understanding bitcoin. One can pay for travel using bitcoin in Switzerland. So if these countries can see value in this and where it’s headed, we should also pay attention.”
RBZ governor John Mangudya, who in May banned virtual currencies, has in the past made suggestions about investigating in opportunities arising from the blockchain technology. But other financial regulators are already looking into this.
In South Africa, that country’s Reserve Bank has piloted an inter-bank settlement system code named Project Kohka, which runs on the Ethereum blockchain. Aiming to speed up payments, the system is understood to have performed “exceedingly well” during simulated trials for real-time gross settlements between banking institutions.
Like the RBZ, the South African Reserve Bank does not recognise cryptocurrency as legal tender, urging caution in their trade. But that has not prevented the South African revenue authority from taxing profits made from cryptocurrency transactions.
