Zimbabwe to consider crypto

Zimbabwe to consider adopting crypto

Zimbabwe is a country that knows a thing or two about inflation.

In 2008 its year-on-year inflation rate was 89’700’000’000’000’000’000’000 %, leading the government to stop printing the currency the following year.

In June 2019 a new ZimDollar was launched, and by July 2020 the inflation rate was already at 737%.

In a desperate (and vain) effort to curb this process, Zimbabwe banned the use of foreign currencies in 2019, so many people quite naturally turned to Bitcoin to try and preserve their wealth. However, the government had previously banned banks from processing crypto, which forced people to go underground.

Today most crypto trading happens on a P2P basis and through channels like Telegram or Whatsapp, which is of course far from ideal, as it creates a fertile ground for all sorts of scams.

Fiat money is based solely on the trust that people have in it, and no ban of alternative store of value can create this trust. This idea must have crossed the mind of the Head of the government Technology Unit Charles Wekwete who spoke about the possibility of adopting crypto as a legal payment service at this week’s Computer Society of Zimbabwe summit. According to Mr Wekwete, consultations with the private sector were underway.

Zimbabwe faces a choice: keep clinging to the idea of a stable fiat money and repeat its previous mistakes, or adopt Bitcoin as legal tender for the sake of its people. This is not an easy choice, especially given all the interests at stake… but at some point, people must come first.