Bitcoin Forum

So, I reckon you guys saw this ===> https://www.cnbcafrica.com/2024/zimbabwe-relaunches-currency-in-latest-inflation-fight/

The Central Bank Governor says, “We want a solid and stable national currency in this country” ... sure, but for how long, until it slides into infinity.

The ZiG are backed by a basket of foreign currencies and gold and ZiG is short for Zimbabwe Gold. 🤔

So if you paint a pig blue and you put a bow around it's neck... it's still a pig... right. So, ZiG was a digital Gold token before, but it has now been renamed to GBDT

" Banks must convert Zim dollar accounts into ZiG accounts, and new ZiG notes will enter circulation on April 30. - Source : https://www.ledgerinsights.com/zimbabwe-switches-to-gold-backed-zig-currency-inspired-by-digital-token/

Let's get the Popcorn and see how this is going to bring down other currencies around it.  ::)  In Crypto currencies it is a lot like a shitcoin being pegged with a stable coin.

I wonder what will happen if countries like this, switch over to Bitcoin (Lightning Network) ... because a lot of African countries are using digital payments like MPesa, so they can do this.

Bitcoin is not a solution here. Zimbabwe is facing this hyper inflation issues since a long time now. They have taken multiple extreme measures to stop the hyper inflation but nothing really worked. In order to arrest the hyper inflation, introducing Bitcoin will help them to stabilize the economy. But the population of Zimbabwe is around 16 million. Bitcoin is not ready to handle the increased volume from these 16 million new users. That might introduce new problem even for the existing users of Bitcoin.

Bitcoin should not be considered as a magic wand for all problems.

We should not expect seeing the government or any centralized industry support for bitcoin when they have other assets and inventions that they will need the support of the people to go for, we are the ones to decern from what we want, we may not have to argue our way down with them, instead, silently go for bitcoin in cryptocurrency and achieve our financial target or freedom in it.

I read this news today and wondered within myself why they didn't opt bitcoin, but went for gold, but on a second thought, I also thought maybe I am thinking what I am thinking due to my possible obsession with bitcoin and crypto currencies in general.

But on a more serious note, Zimbabwe had a chance of making a good history for themselve, but unfortunately, the government failed the people again, gold is outdated, it is impossible to verify that a currency is truely pegged with gold, since that gold can only be kept in the custody of the centeral bank, and there is no way citizens can actually verify that indeed, the central bank are holding the exact amount of gold worth the exact amount of fiat currency notes in circulation in the country.

But with bitcoin, it's actually possible, as long as a databased is built that shows the entire citizens of the country how much fiat currency notes that are in circulation, citizens can then verify this by checking the bitcoin holdings of the central bank through the bitcoin block explorer, to be sure that the worth of bitcoin in the wallet also tallies with the number of fiat notes in circulation.

Anyways, this is just me think out loud, this actually can be a very good idea, or a very bad idea after deep research, but all the same, they should have just made bitcoin a legal tender too.  ;D

Nah, you are making it too complicated. You simply educate people about Bitcoin wallets and then allow them to buy and sell it. The best solution will be to promote the use of the Lightning Network, because the transaction speed and cost are much lower than on-chain Bitcoin transactions, which will be best suited for micro payments too.

The Blockchain is already one gigantic database of transactions, so you do not need anything else. The Zimbabwian government are debt driven, so that might pose serious problems.

It has been a leading concern with the inflation that they have. Knowing that they have so much produced money and with just paper you already have Zimbabwe dollars and stuff. I think they need to really pull themselves together and study economics and finance for the country and hopefully recover from what happened with them.

Having Bitcoin would definitely be a great asset for them to back on and not backup their actual dollars or something.

I don’t think a country would want their currency to be not controlled by their own. They would never use bitcoin alone as their currency to help inflation because they still need to have access over the people’s money.

Bitcoin’s decentralized nature is not the most attractive thing for the governments. They could try to endorse it as a payment method but not officially as their legal currency.

Adopting a new currency is not the solution to inflation. Even if Zimbabwe adopt Bitcoin as a currency and doesn't adopt the right economic policies, inflation will persist. The genesis of Zimbabwe's inflation was not a result of the printing of money but of the bad economic policies of the Robert Mugabe government. The government increased public spending without diversifying its sources of income, forceful taking back of agricultural lands from white farmers, drought and Western sanctions which affected the economy negatively. To handle these economic problems, the government engaged in the printing of currency which led to hyperinflation. Except the government handle the main economic problems, Bitcoin will have little or no effect.

Correct, even if bitcoin could handle all of those new users, politicians will refuse to back bitcoin up in that way, and while they will hide the real reason for this with speeches about the sovereignty of the country and other stuff like that, we know that deep down this is about the control and power fiat currencies gives them, a power they are not willing to give it up just like that, and what better example than this, in which a government that became the laughingstock around the world due to the high level of inflation of their fiat currency, is once again forcing their citizens to adopt a new one.

I guess another fiat is never the solution. It doesn't actually address the problem. So it isn't even a band-aid solution; it is the wrong solution to the wrong problem. It won't be a surprise, therefore, if there won't be any alleviation of what Zimbabwe is going through with this step.

They might want to learn something from Venezuela who changed currencies and denominations a number of times but the problem remains. Changing fiat doesn't mean a lot. After Venezuela changed from Venezuelan bolivar to bolivar fuente to bolivar soberano to petro to digital bolivar and to whatever else, the problem of hyperinflation remains until now. It isn't a solution to change the number of zeros. It isn't even a solution to peg the currency to a more stable fiat like the USD. If there's incompetence and corruption and other socio-political and economic maladies, changing fiat is pointless.

Your analysis defeat the idea of changing currency and deeply in my heart speak volume of me, I will start by saying this you can't fight a problem without knowing the root course of the existing problem.  they need identify why previous currency haven't meet up requirements and check with all sort of analysis, including visibilities study of market and other nations who has taken such step before any conclusion of directing their step to introducing additional currency.

The analysis can help allot to identify if the fault is coming from the government policy, reduction in productivity or shortage of natural resources or limitations to workforce including embezzlement etc that is common among African leaders, the results can profer better solution rather than taking step to introduce another currency because the more currency they accommodate the more the problem will increase good economic analyst can give them some hidden facts.

There is a good quote from one of the most famous anime: "It's pointless to increase the number of heads if they're all empty". They are re-launching their national currency for the sixth time in 44 years. Their first Zimbabwean dollar was launched in 1980, their sixth ZWL is getting launched soon. Six currency failed in 44 years, this means that they should stop printing an unlimited supply of money and there will be no inflation. Also, they have to work on their high corruption to lower it, reward students who study science and math, attract investors and etc...

I agree with your line of thought, considering the value of the countries currency, redesigning it and renaming isn't the solution to reduce inflation and to add value to the near valueless situation of the Zimbabwe currency. Corruption has been the whole mark of the economic crisis Zimbabwe is facing right from the time of late president Mugabe, so why not increase your productive base, export your product and get Forex and add value to your local currency. Also make the economy attractive for foreign investors which has to do with reducing corruption so you can promote healthy competition between local and foreign investors.

The Zimbabwean CBN is getting it all wrong by relaunching a new fiat currency, if at this age and time they feel a new fiat will give their economy a facelift, then they really need to rethink their stance.

launching another gold-back currency is them rethinking their stance. they have been doing this every now and then but kept failing eventually they will succeed at this iff they learn every time.

since 2008 they have already launched different currencies. what they have not tried and i think they couldn't stop this from happening because USD, GBP, Ruppee, Yen, and Yuan are still circulating in the country while they also launch this gold-back currency. this gold back may just be used by 30% while the rest will still be using other county's currency.

The conversion you quoted reminds me of the typical case when the developers of an altcoin (usually shitcoin) ask all holders to switch their coins to the new ones before certain date if they don't want to lose them all... It's impressive to see that it also happens in real countries in the world.

About using Bitcoin, although others said that it is not a feasible solution, I think that it could work by using LN or a different scalability solution. 16M people are not so many, if they also use USD, GBP, Ruppee... and the other currencies mentioned above for day to day payments.

That's not how it's going to work because if you still got the debts from your previous currency, it will carry over and most merchants and businesses would probably stop their trading relations with you because they're trading with you at a loss. It's also difficult to do a switch in currency because not all the money would be easily recalled and people are going to resist that big change. Maybe it might work in some countries but do it in a thriving one, you'll be guaranteed to see chaos.

This will just be the same as before. Nothing will happen to this 'rebranding' of their currency and it will still end up in massive inflation if they don't cut the problem at the source. Apparently, it seems like the Zimbabwean officials themselves are the problem and not their currency. Rampant corruption, mishandled economy, and a lot other problems they aren't talking about since they are busy passing the blame on their failed currency and not themselves who, by the way, are the policymakers and enforcers of the rules they create.

Give it a month or two and they will have the same problems all over again. Their own citizens have lost faith to their own currencies a long time ago, and launching a new one every X amount of years isn't the solution to this problem.

Oh, really? I guess that this guy didn't want "a solid and stable national currency" in the last several decades, when Zimbabwe was suffering from hyperinflation. Or maybe this is the new Zimbabwe central bank governor, who replaced the old one, who was causing the hyperinflation(I'm not familiar with politics in Zimbabwe). Anyway, failed countries like Venezuela and Zimbabwe always try to fix their financial problems with "new currencies"(like PETRO in Venezuela), that are "backed" by stable assets. And the end of the day, this is all false promises made by dictators and corrupt politicians.

I have mixed feelings about it. On the one hand, the old currency was totally out of control, so I don't think stabilizing it was a viable option. Also, sometimes rebooting fiat does work and lead to something relatively stable. On the other hand, Zimbabwe had been in hyperinflation mode for a while due to bad monetary policies, and simply changing the currency without changing the underlying cause (the policies) is unlikely to lead to a good result.
Hyperinflation is no fun for those who live under it, so I hope things will get better, but for now, it doesn't look like the kind of major shift that Zimbabwe needs.

When a country fail, the government accused different people with different companies of their failure. And in my opinion no country economy is week but the political will and policies of the country are week and that is why countries are planning to reprint, redesign and reproduce New currency. If the leaders are willing to develop work for the betterment of the country then the country economy will be very strong and bounce back with a strong market exchange. And if the leaders are weak even the new currency can't withstand even the test of time. African countries economies are dollarcentric in nature and because of the weakness of the leaders that have no political will to develop the continent.

If Zimbabwe want a stable currency then it is not to rename or paint new currency because the value will never change. Almost all the African countries are facing that the challenge. The eNaira in Nigeria is dumped because the leaders are not yet for the good for the people but for their children and pocket. We are talking about political will. That is want the president says can be implemented by the agencies and citizens and foreigners follow suit and that is part of a country foreign policy.

All these changing of currencies in Africa is just a waste of time. Let them just make the old currency more stronger.

Their problems started when they started to kick people off their farms. (Political Land grabs) The Western countries turned against the then President, Robert Mugabe and his corrupt Cronies and things just started going downhill from there. (Elections were rigged and they used violence to keep them in power)

They then climbed into bed with the Chinese and other communist countries and it just got worst. You cannot simply replace your fiat currency and think you have solved all the other problems with the corruption, Nepotism and mis management of tax payers money.

i understand that what they want to achieve is a currency that is stable and valuable, because it is backed up directly by gold. however, they miss a crucial point here, that the value of a currency is not only based on the assets that back it up, but also the economy of that country. if they think that introducing a new currency backed by gold will make their currency more valuable, perhaps they will find other problems that are more complicated than the previous problems.

so instead of introducing a new currency and wasting money on it, it is better for them to improve the economy as a whole and eradicate corruption, because these are the two things that are actually the most appropriate to deal with, instead of introducing a new currency.

At some point the government wouldn't really care about the economy situation but all cares are about themselves. Just as being advised that we shouldn't sit on expecting what the government would do for us Instead we buckle up and find our ways depending on our desires.
With all being said , bitcoin is a decentralized non custodial currency in a platform of assets potentiality. So a government suffering an economy downfall is not only soluable when the government implements the adoptation of bitcoin to their national Economy system. The nation that was doing well and losts its potentials isn't to be accused as their inability to adopt bitcoin to their economy infrastructures neither it was as a cause us mismanagement of resources. So they can always move back and research on their historical factors so they could be able to figure out where their lapses came from and also considers what further Infrastructures they can attain to trigger revenue to elevate their economy level.

Bitcoin is a good infrastructure but let's not assume that any government who's unable to key in to it is a slack of black sliding from the economy growth.
You economy can decide to be in a blackout while you light your self up to your own successfulness. So if you find those profitable potentials in bitcoin as an individual, and the government is not restricting you as an individual to Invest on it the why not you individually to ahead and take a sharpen shape and Invest on it hence you know its valuables.

The hyper inflation that has occurred in Zimbabwe has been going on for too long. And dealing with it will definitely take quite a long time too. But this also reminds me of El Salvador, which also experienced this in the past with their own currency. El Salvador once had their own currency but due to hyper inflation they finally switched to the US Dollar. And that is indeed a solution for them in this condition. But in the case of Zimbabwe I think it is much more complicated. At least using gold coins or something like that is still a good temporary solution there. but well we know that maybe it can't be a long term solution. The problem of hyper inflation is indeed very complicated and I personally have not been able to think of the best solution for this problem. I hope Zimbabwe can soon find a good solution to this problem.

What you are saying there will only apply if they create a new currency alone which are not backed by anything or something decentralized like gold. Apart from gold, it is said that their new currency is also backed by other foreign currencies.

I am sure that they pick those strong currencies which may not be possible if their economy is also not strong and those countries can't afford to not maintain it because they are already used to it and that gives them a sense of respect. I wouldn't hate them for doing this and in fact this can be their motivation to improve their country later on. Once it happens, they might be ready to create their original currency again which can now perform better this time.

If there is hyperinflation in a country, then no change in currency, be it fiat or cryptocurrency, will help it. High inflation indicates a sick economy, not a sick financial system. Therefore, first of all, it is necessary to develop the economy: to encourage the development of industry, agriculture, tourism, and other economic projects based on the location of the country and its level of development. We need to create jobs and provide decent work for people. Then the financial system will improve with any currency.
As for a decentralized cryptocurrency, the best financial model would be for it to circulate alongside fiat currency, without replacing it.

I agree that the sudden change in currency isn't going to solve the hyperinflation Zimbabwe is facing. The issue lies in their economy; it's hardly the currency itself. This is the result of poor financial handling by the government; adding a few zeros in the back and printing new bills isn't magically saving anyone. This simply renders their currency useless and incompetent to be used for daily transactions. Even a complete switch to the US dollar wouldn't save a broken economy, as this doesn't reverse the fact that their citizens are struggling to get by due to excessive costs of living.

Fiat currencies are controlled by the government and aren't actually backed by commodities; only a few of them, such as the Norwegian Krone or the New Zealand dollar, are backed by commodities.

Even if a currency by itself cannot fix the huge economic problems the government of Zimbabwe is facing, it could surely help, after all two characteristics that money is supposed to have is to be an unit of account and a store of wealth, and a strong currency could generate enough confidence among the general population to save and invest with the currency, but when the currency is being inflated away by the government, it is impossible to use such currency to save or to use it as a measure of wealth.

I'm from Mozambique and my country is close to Zimbabwe, Zimbabwe borders my country, this economic problem in Zimbabwe starts because of the dictatorship of the political party that governs Zimbabwe, the political party that governs Zimbabwe has ideas that foreigners There should be no wealth in Zimbabwe and only people who were born in Zimbabwe and are from the government party should have money. It is a party that does not accept democracy, does not accept fair and transparent elections and keeps killing people who think differently. because of the dictatorship, the us government recently placed sanctions against the president of zimbabwe and other people:


source: https://home.treasury.gov/news/press-releases/jy2154

All that the US government said is not something that is happening now, it is something that has been happening for more than 30 years, the problem with Zimbabwe's economy is the political party that governs the country. Even if they put gold coins on the streets for transactions, it would not solve the problem of Zimbabwe's economy. I read some people talking about bitcoin that could help zimbabwe. The point is this: those people who are in the party that governs Zimbabwe are dictators and murderers, they hate everything they can't control, they wouldn't accept bitcoin because they simply wouldn't have the power to control bitcoin, it's easier for them to accept china currencies do accept bitcoin.

The solution for Zimbabwe is very simple: remove the party that has been governing the country since independence and hold fair and transparent elections, after that have an independent judicial system, have a parliament with greater powers and reduce the president's power, have independent police and have an independent exercise. The governor of the bank will be independent so that he can make decisions on technical grounds and not on ideological grounds and the interests of the political party. bring in human rights organizations to confirm that human rights are being respected and punish any corrupt person and thief when they commit a crime. When they do this, the governments of other countries will remove sanctions, and the country will produce more again and attract investors, thus having more jobs and people's purchasing power will begin to return and little by little they will have a strong currency. This is the only solution for them.

I'm hoping it's going to assist because it's practically backed by gold, and it's setting solid foundations for a stronger currency, so theoretically, you cannot simply start adding zeros and printing a ton of worthless bills. We'll see to what degree, though. This situation is extremely similar to Venezuela's, in which hyperinflation has also skyrocketed over the past few years. It's saddening for the citizens of these countries to not be given a practical solution.
I'm unaware of the whole picture regarding the political and economic situation in Zimbabwe. Certainly, their government is incompetent in providing an actual solution for the country's hyperinflation issues while taking advantage of the country's natural resources, such as gold and diamonds, for their own profit. I haven't found much regarding the current political party, but the source you quoted provides some serious allegations against the current government.

Also, Bitcoin is not a panacea that works with everything, especially in this case, where the government is trying to control everything that's possible.

It is unthinkable for a country that was suffering from hyperinflation, problems with electricity, education, and laws to ask users to switch to using Bitcoin, whose price changes every minute.
The middle and poor classes are affected by exchange rate changes, such that $100 may be enough to support a family for a month. Therefore, in such countries, citizens do not have the luxury of investing in Bitcoin and waiting for several months before they find themselves wealthy or the value of their investments increases. Rather, they need every dollar to spend on the basics today before tomorrow.

Im sure that nothing will be changed with new currency

This doesn't really mean that they are going to get any better, obviously they will have to try something though, they cannot just make it stay the way it is right now, they have to figure out a way to fix things and I believe that they are doing the best they can. The fact that it will not work and fail, doesn't mean that they shouldn't give a try to it, of course they could fail but even with that they need to make sure that they are trying their very best.

I believe that they are going to keep trying to figure out a way, either this or something else, eventually they will get better. Maybe it will not be great, but they will find a way that is better than what they have right now, and for that to eventually happen, they need to try like this.