Zimbabwe Issues New Generation Zimdollars to Solve Hyperinflation; Can Bitcoin Change the Narrative?
Zimbabwe’s authorities recently re-introduced the Zim dollar in a move to curb the decade long hyperinflation within its monetary ecosystem. The African nation has planned to inject one billion Zim dollars within the next half year as a part of the currency stabilization process.
However, the citizens were not so happy after banks capped the maximum amount one could withdraw in a week at 300 Zim dollars, currently equivalent to $20. This can barely cater for their day to day needs given the high risk affiliated to currency fluctuation within Zimbabwe’s economy. Prior to the return of the Zim dollar, authorities were using a basket of International currencies to salvage the situation.
Mobile Money in Zimbabwe
The masses in Zimbabwe have lost confidence in their government’s ability to provide prudent financial oversight over the years. As a result, alternative payment avenues such as digital money are better options for the citizens. EcoCash, a mobile cash transfer provider, is among the firms enjoying Zimbabwe’s hyperinflation woos. They charge premiums close to 50%, Zimbabwe’s government had in fact directed closure of such institutions but lifted the ban due to public demand.
According to the latest stats by the Central Bank of Zimbabwe, money transacted through mobile phone accounts for over 80% of the volume. This begs the question whether the African nation is ripe for a Bitcoin takeover to minimize the cash shortage and inflation worries.
Bitcoin as a Solution for Zimbabwe
A Zimbabwean writer by the name, L.S.M Kabweza, acknowledged that Bitcoin might be better than the country’s unpredictable governance. He noted that the digital asset volatility is more conserved compared to solutions that have been offered in the past. Furthermore, the bigger issue which is trust can be solved by the decentralized coin.
Basically, BTC adoption across Zimbabwe would mean the use of digital wallets as custodians. This is a role the government currently plays through regulation and has not managed to build sufficient trust with its people. It therefore follows that Zimbabweans might opt to accept BTC once most people hold the digital asset.