Some Suggest Bitcoin As An Alternative for Zimbabwe

Zimbabwe has been shuddering all century from a failing economy that continually causes cash shortages and tumultuous market inflation. According to a recent editorial from the African Mail & Guardian, some economists are suggesting bitcoin as an alternative.

Also read: Ontario Securities Commission Hosts Fintech Hackathon

Economist Says Zimbabwe Could Benefit From Bitcoin

Since the year 2000, Zimbabwe’s economy has suffered through a deep economic recession. The country has experienced widespread poverty and exponentially high unemployment rates. The government abandoned the Zimbabwe dollar in 2009 due to hyperinflation, and has been suffering from cash shortages.

One economist from the region, Phillip Haslam, believes bitcoin could give Zimbabwe’s economy a boost. Bitcoin is a stable asset not backed by a corporate entity or central bank, and has gained attention across the African continent. Haslam said that bitcoin, alongside fixing fluctuations in cross-border trade, could be the answer.

“We are very excited about bitcoin as a stable currency alternative. The thing about bitcoin is once you import it into the country, you don’t have the problem of the currency eroding and perishing like you have with notes. It’s a system that allows for privatized banking. Effectively, the bitcoin system is both a currency and international payments platform,” explained Haslam.

The Bitcoin Seeds Have Already Been Planted

This past October Bitcoin.com reported on BitMari, the Pan-African Bitcoin wallet provider trying to push cryptocurrency adoption. The company raised money for the Zimbabwe Women Farmers Accelerator and used Bitcoin to fund the effort. The project is a collaboration with the organization Agribank and the Women Farmers Land and Agriculture Trust.

One resident from Zimbabwe has been saving $35 per transaction by using Bitcoin for remittances. According to William Suk, he saves money on fees and can make a small profit from time to time as well. Suk describes an arbitrage scenario where he buys bitcoin and sends it to his family through an EcoCash account.  

“I have been using bitcoin to send money to Zimbabwe for more than a year in order to save money on fees and make a small profit on the exchange rate. As a result, I now use only about $275 to send $300 to my parents’ EcoCash account,” explained Suk in a blog post.  

This represents approximately $35 in savings per transaction compared to the $310 I previously used by channelling remittances through Money Gram. This method only requires moderate computer skills and is a good way to experiment with a very interesting technology.

In Times of Economic Hardship, Many Countries Could Lean on Bitcoin

Quite a few people are concerned with the Zimbabwe economy and believe bitcoin could relieve some economic hardship. Since adopting a multi-currency system in 2009, the country’s cash shortages have affected nearly everyone. There are long lines at financial institutions, and many believe people are hoarding U.S. dollars. Alongside this, there is very little trust in the region’s banking practices.

Bitcoin is a currency that is far more stable and has also risen dramatically in value over the past year. The cryptocurrency is also free from government intervention, and may reach higher levels of value due to its scarcity. Zimbabwe and citizens from many other countries around the globe are quickly realizing that bitcoin can be a safe haven, a crowdfunding tool, and a remittance application all in one.  

What do you think about residents from Zimbabwe embracing Bitcoin? Let us know in the comments below.

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Images courtesy of Shutterstock, and Pixabay. 

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