Zimbabwe VP Warns Money Changers: Illegal ZiG Trading a Criminal Offense

Zimbabwe Vice President Constantino Chiwenga has issued a stern warning to money changers, stating that the illegal trading of the gold-backed digital currency ZiG on the black market is a criminal offense similar to the illegal sale of gold. Chiwenga cautioned the money changers to cease this practice, saying "hatide kuti uzokanganiswe wozoita hupenyu waremara" (we don't want you to be misled and end up with a miserable life). He threatened that those who continue to engage in this illegal activity risk being rendered crippled, indicating that there could be violent consequences for their actions.

The government has vowed to eradicate illegal currency dealings following the launch of ZiG three weeks ago. The police recently arrested 65 illegal foreign currency dealers in Harare's central business district for allegedly contravening the Exchange Control Act. The dealers were found soliciting US dollars from passers-by and using mobile money transfers to conduct transactions in both ZiG currency and US dollars. The police also seized their mobile phones, point-of-sale machines, and ATM cards, indicating their involvement in illegal activities.

Why this matters: The crackdown on illegal currency trading reflects Zimbabwe's efforts to stabilize its economy and promote the adoption of the new ZiG digital currency. The success of ZiG is critical for the country to curb hyperinflation and restore confidence in its monetary system.

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu admitted that the Zimbabwean authorities did not have much knowledge about structured currency and engaged a World Bank consultant before the launch of ZiG. Mushayavanhu said most of the input for ZiG came from the World Bank official, and if there were any shortcomings, it was not his fault but the World Bank's. While some Zimbabweans have embraced ZiG, others remain skeptical and believe it will fail like the RTGS and bond notes. Renowned economic analyst Daniel Silke warned that ZiG alone will not solve Zimbabwe's economic woes, likening it to a "plaster over a wound" rather than treating the underlying causes.

Key Takeaways

• Zimbabwe VP warns money changers against illegal ZiG currency trading.
• Police arrest 65 illegal forex dealers in Harare for violating Exchange Control Act.
• Crackdown aims to stabilize economy and promote adoption of new ZiG digital currency.
• RBZ governor admits lack of knowledge, blames World Bank for ZiG shortcomings.
• Skepticism remains about ZiG's ability to solve Zimbabwe's economic woes.