RBZ rejects proposals for cryptocurrency-backed point of sale

05 Oct, 2018 - 00:10 0 Views
RBZ rejects proposals for cryptocurrency-backed point of sale

eBusiness Weekly

Jeffrey Gogo
The Reserve Bank of Zimbabwe (RBZ) has rejected proposals for a cryptocurrency-backed payments platform, as a Nigerian agriculture company on September 28 installed a similar point of sale terminal, allowing purchases to be made in bitcoin and ethereum.

Prosper Mwedzi, a Zimbabwean lawyer based in the UK and founder of the tourism digital currency VicFalls Coin, last month wrote to the RBZ seeking clearance to run supervised trials on a payments system called Xpos, which is underpinned by cryptocurrency.

Mwedzi has struck a deal with Pundix, an Indonesian financial technology company, which has shipped or is in the process of shipping up to 5 000 Xpos devices to several countries including Colombia, the UK, Korea, Hong Kong, Switzerland and Brazil. The agreement allows Mwedzi to install the payment terminals in Zimbabwe, if authorities allow him to do so.

The payment system works more or less in the same way as the traditional POS system, only that the terminals connect to the blockchain and settlements are made via virtual currency. Pundix, the Xpos maker, says the device supports transactions through mobile wallets and bank cards.

However, the RBZ’s director of banking supervision, Norman Mataruka, has put paid to Mwedzi’s plans.

“We refer to your letter addressed to the Governor (John Mangudya) . . . contents of which have been noted,” said Maturaka in a letter directed to Mwedzi, which has been obtained by the Business Weekly.

“We would like to appreciate your intuitiveness and take this opportunity to advise that the Reserve Bank is working on a comprehensive financial technology framework to guide the conduct of exercises to test the emerging innovations,” said the letter, dated September 28.

Mataruka continued: “In this respect, we shall reach out to several players and yourselves as part of the broader stakeholder engagement once the framework is finalised. In the interim, it is our view that it would not be prudent to enter any agreements with third parties in anticipation of a working relationship with the Reserve Bank as the testing arrangements are still under consideration and the timing is yet to be specified.”

Heartbreak as competing African economies move forward

Mwedzi, whose plan to woo tourists to the world famous waterfall, the Victoria Falls by tokenising the Zimbabwean tourism experience, remain hung up due to a ban on cryptocurrency by the Reserve Bank of Zimbabwe, was heartbroken.

“The RBZ has not approved my request,” the 33-year crypto proponent, who is also a software engineer, told the Business Weekly, in an interview this week.

“They (central bank) seen to be suggesting that we will get consulted when they are ready. I wonder if it’s a way to get me to go away? I would have preferred it if they had dates. Nigeria has gone ahead of us. It’s heartbreaking, I signed the agreement at the same time as the guys in Nigeria.”

In the West African country, Pundix installed the Xpos at Joetech Systems Ltd, an importer and distributor of agriculture products from Abuja, on the same day that Mwedzi received the letter announcing the rejection of his proposal.

Pundix business development manager Michael Lawal, explained how the new payment platform works at Joetech Systems Ltd works.

“I have 0.01 bitcoin and I am going to make a transaction of 200 Naira (Nigerian currency),” Lawal said, in a video demonstration, on September 28.

“The cashier provides three options – to pay either with cash, XPass card or XWallet. If you are paying with Xwallet you will need to scan a QR code. I am going to use XPass card and pay using BTC. Once you choose your payment option, the cashier automatically calculates the rate of conversion using current market rates to the local currency, which is Naira. You have two seconds lock in period to safeguard the consumer and the merchant,” he said.

With a population in excess of 185 million, Nigeria is not only Africa’s most populous nation but also the continent’s biggest bitcoin and cryptocurrency users. Nearly $260 million worth of bitcoin has been traded by Nigerians on just one exchange, localbitcoins.com, according to a report by the platform earlier this year. However, issues of regulatory uncertainty continue to cast a shadow over the future of cryptocurrency in the West African country.

The Central Bank of Nigeria (CBN), which has previously cautioned against buying and selling cryptocurrency, last week reiterated its warning.

“We have not seen any country where cryptocurrency is regulated,” Godwin Emefeile, governor of the CBN said.

“We are not at home with cryptocurrency because there is no issuing authority…

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