Zimbabwe & Cryptocurrency — A Tale of Hyperinflation
Zimbabwe has “trillion-dollar bills” worth pennies.
Enter hyperinflation: the bane of a stable society.
“The Impact of Cryptocurrencies in Zimbabwe. An Analysis of Bitcoins,” written by Anthony Tapiwa Mazikana in 2017 concluded that the Reserve Bank of Zimbabwe is hostile toward cryptocurrencies. This is no surprise — no entity wants to give up their monetary control when sovereign currency is both a money making machine and political tool. Yet, the citizens of Zimbabwe appear to want to exit the murky monetary pool they swim in and move to the greener pastures of cryptocurrency.
Anita Posch, a podcaster and correspondent with CoinDesk, spent three weeks in Africa in February 2020 interviewing a variety of individuals about Bitcoin in Zimbabwe: “I wanted to see myself if this is true and how far Bitcoin is known and used there,” she said in her podcast, “Bitcoin in Africa.” What motivated Anita to go on this unique trip?
“Bitcoin is in my eyes first and foremost not a speculative, trading object, where everything is about price. For me it’s a tool of liberation that enables individuals and communities to free themselves of tight restrictions by authoritarian or totalitarian nation states that harm people’s human rights.”
Anita has pointed out that while first world countries go after cryptocurrency because of crime and lack of regulation, countries such as Zimbabwe must wage an all-out war against cryptocurrency because it would result in greater monetary freedom of citizens and a loss of power from the hands of the elite.
“Corruption is everywhere. And it seems that there are different rules for different people. Yes, I think one can say that for every country, but the differences are so big here. If you have USD, if you are in a high position, if you are in the right network, you can have a great life in Zimbabwe. I have seen private houses with swimming pools blue as the sky.” — Anita Posch
Unfortunately for the majority of people in Zimbabwe, they are utterly tied down by the Zimbabwean dollar and monetary policy that cripple so many into abject poverty. When Anita asked an anonymous Zimbabwe online entrepreneur, “What do you think the use cases for Bitcoin are in Africa, or in Zimbabwe?” the anonymous entrepreneur was rather enthusiastic:
“If I can walk into the future . . . I see a lot of people actually taking the Bitcoin method . . . it’s because of number one, our inflation rate . . . some people can actually use Bitcoin as a method to save money.”
The value of cryptocurrency is tied to guaranteed scarcity, lack of inflation, and the underlying desire for crypto’s attributes.
But even amid the inflation in a country far away, the United States dollar reigns supreme as the determinant of wealth.
It remains to be seen if cryptocurrency such as bitcoin will continue to be adopted as a global currency that holds value better than sovereign hyper inflationary currency. At a bare minimum, cryptocurrency is an excellent solution to costly remittance fees developing nations’ commerce face on a regular basis.
In this article series, I share excerpts and stories from my book, Building Confidence In Blockchain — Investing in Cryptocurrency and a Decentralized Future. I hope you enjoyed this post — if you enjoyed it and want to connect you can reach me here via email email@example.com or connect with me on social: (twitter) https://twitter.com/l_woetzel or (LinkedIn) https://www.linkedin.com/in/carter-woetzel-16936b136/ .
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Anthony Tapiwa Mazikana, “The Impact of Cryptocurrencies in Zimbabwe. An Analysis of Bitcoins,” SSRN Electronic Journal, May 24, 2018
Anita Posch, “Part 1 Zimbabwe: Ideal Conditions for Bitcoin? — Bitcoin in Africa: The Ubuntu Way,” March 5, 2020, In Bitcoin Co Podcast, MP3 audio, 48:00.
Anita Posch, “Part 2 Living in a Multi-Currency World — Bitcoin in Africa: The Ubuntu Way,” March 26, 2020, In Bitcoin Co Podcast, MP3 audio, 43:00.
Anita Posch, “Part 3: Using Bitcoin in Zimbabwe- Bitcoin in Africa: The Ubuntu Way,” April 2, 2020, In Bitcoin Co Podcast, MP3 audio, 43:00.