Eddie Cross, a member of the Reserve Bank of Zimbabwe’s (RBZ) Monetary Policy Committee (MPC) has attempted to shed light on why authorities cracked down on Cassava Smartech’s EcoCash.
Cross told OpenParly that in February the central bank discovered that EcoCash, by far the country’s largest mobile money operator, was turning over three times the amount that all the commercial banks in the country, combined, were turning over.
The former MDC legislator said the main purpose of Ecocash was to handle relatively small transactions but had gone rogue and was running a Ponzi Scheme.
Cross said the RBZ had to take draconian measures and ask the company to shut all agent lines and cap daily transactions to just $5 000 per day.
The central bank accused EcoCash agents of buying foreign currency on the black market resulting in the precipitous fall in the value of the Zimbabwe dollar. Said Cross:
When we intervened the black market rate had gone down to 200:1. Ecocash has gotta play ball. They have gotta start behaving responsibly. They are not to use themselves for this kind of speculative Ponzi schemes. They were printing money. They were giving credit, on an unlimited basis to their agents. You can’t do that.
Following the crackdown on mobile money transactions and the introduction of a foreign currency auction system by the RBZ, the Zimbabwe dollar has stabilised against the United States dollar.