When your Fiat currency fail, reboot and launch a new one -Zimbabwe ZiG

[Kakmakr]

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.

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[avikz]

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.

[Dunamisx]

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.

[Fivestar4everMVP]

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. 

[Kakmakr]

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.  

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.

[crwth]

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.

[Reatim]

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.

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.

[Fiatless]

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.

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.

[Silberman]

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.

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.

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.

[Darker45]

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.

[Uhwuchukwu53]

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.

[shield132]

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. 🤔

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...

[Spaceman1000$]

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. 🤔

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.

[electronicash]

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. 🤔

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.

[Porfirii]

-snip-

" 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/

-snip-

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.

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.

[blckhawk]

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.

[dothebeats]

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.

[davis196]

The Central Bank Governor says, “We want a solid and stable national currency in this country”

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.

[kryptqnick]

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.

[Mate2237]

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.