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Author Topic: [2016-05-17] Zimbabwe’s Cash Crisis Is Bitcoin’s Boost?  (Read 306 times)
a7mos (OP)
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May 17, 2016, 07:42:38 PM
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Zimbabwe’s Cash Crisis Is Bitcoin’s Boost?


A recent survey by The Zimbabwe Standard has shown that a number of banks in the central business district of the country’s capital, Harare, has long queues to withdraw cash with others running out of cash by midday.

This demand for cash is fuelled by a lack of trust in an impending introduction of bond notes by the apex Reserve Bank of Zimbabwe.

Although its governor John Mangudya says the bond notes would not happen within two months, the latest development better highlights the growing need for a cryptocurrency like Bitcoin as a dependable option for users.

Why Zimbabwe banks lack credibility

This lingering cash crisis and its attendant challenges have reportedly drawn the attention of illegal foreign exchange dealers into the country to do fast business. In other cases, some bank staff allegedly take the advantage to charge clients up to 10% ‘commission’ on electronic transfers to the accounts of money changers in return for hard cash.

The main contention surrounds whether money deposited in banks would have the same value it deserves once the financial institutions will start giving bond notes.

Zimdollar fears

This skepticism hanging on investing in the bond notes had been worsened by a former finance minister’s claim that the government is trying to introduce bond notes with the aim of bringing back the rejected Zimbabwe dollar through the back door.

Tendai Biti said reintroducing the Zimdollar will be a disaster because it could be over-printed again leading to a broad money supply over the country’s GDP to make too much money chasing too few goods and ending up being dysfunctional.

When it was in use, the Zimbabwean dollar denominations rose to have a 100 trillion dollar bill becoming the note with the most zeroes of any legal tender in recorded history. The bills, which still auctions on eBay, circulated for a few months in 2009 when the country experienced one of the toughest hyperinflation in history with US$1 changing for trillions of Zimdollar.

The currency was eventually abandoned in favour of the South African rand, the US dollar and several other foreign currencies.

Would Bitcoin be a better option?

Whether Bitcoin would be a better option for the southern African state of Zimbabwe to adopt as an alternative method of payment or not has triggered an online discussion of late. The discussion is still ongoing and would possibly create greater awareness about the need to adopt Bitcoin for better safekeeping or for other profitable use.

A piece by L.S.M Kabweza suggested that reliance on Bitcoin helps with Zimbabwe’s trust problem. In a forum where there have been talks about making a hedge investment using Bitcoins, there were diverse views with suggestions of various forms of investments. However, the most prevalent consensus in view comes with buying Bitcoins itself as a safe investment.

http://cointelegraph.com/news/zimbabwes-cash-crisis-is-bitcoins-boost
Goms
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May 18, 2016, 04:55:09 AM
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If $1 is equal to a trillion zibabwean dollar, do you know how many trillions will be needed to buy 1 bitcoin? I do not think that economy is bouyant enough to transact in bitcoins within the country.
Snorek
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May 18, 2016, 07:25:09 AM
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If bitcoin would be more stable currency they could try to create Zimbabwean paper currency backed by bitcoin.
But I guess current development state of either Zimbabwean financial tech or bitcoin itself it insignificant to even consider this option.
a7mos (OP)
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May 18, 2016, 04:49:03 PM
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If $1 is equal to a trillion zibabwean dollar, do you know how many trillions will be needed to buy 1 bitcoin? I do not think that economy is bouyant enough to transact in bitcoins within the country.

there is no problem with the numbers. 1 bitcoin will remain the same value whether you buy it with any other currency. so why do you see their economy is not ready for btc although AFAIK zimbamwe has a big number of bicoin users in Africa
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