Some reports suggest that Zimbabweans would have to pay US$76,000 to get their hands on just one bitcoin. But is that true and what’s the real story?For anyone trying to keep up with the tremors and earthquakes in the crypto world, they could be led to believe that Zimbabwe is a pending fintech hub. Cryptocurrency in Africa is interesting because it has a real possibility to make a significant change, giving banking access to mass populations often denied financial services – and a chance to improve the economy.
Zimbabwe also falls within this category because its economy is flailing with repeated bouts of inflation. Cryptocurrency has significant potential in the country and many locals have realised that, especially now that foreign currencies have become banned – more on that below.
Lots of Zimbabweans use exchanges like Luno to own a bitcoin wallet and acquire their bitcoin via their platform, but having reliable services is not enough to prevent barriers to participation because the latest reports are suggesting traders are seeking over $50,000 to sell locals just one BTC. So, is this true and what’s the story behind it?
A Background on Zimbabwe and Money
In 2009, Zimbabwe, Zimbabwe abandoned its local fiat currency the Zimbabwe dollar (Z$) and chose to use both the South African Rand and the US dollar. This was because of hyperinflation. In fact, at the time of scrapping the Z$, it was worth so little that you would need around 35 quadrillion of them to buy a single US$.
Due to these changes, Zimbabwe largely became a cashless society and technology was needed to manage the flow of monies. This has also helped it take well to cryptocurrency as most locals already have a habit of using apps to manage their finances.
In February 2019, there was another shift with all electronic money becoming RTGS, which has since become the new official Zimbabwe dollar. As a result, Zimbabwe has tried to protect its new official currency by banning trading with foreign currencies, including the US dollar.
This has resulted in national protests because locals do not trust a local fiat currency and often choose to seek shelter with cryptocurrencies.
So, Is Bitcoin Really That Expensive in Zimbabwe Now?
The answer is yes and no. There have been screengrabs and people sharing stories on social media of traders seeking astronomical amounts to sell their Bitcoin in Zimbabwe. One particular screengrab shows the price set at US$76,000 – a 600% premium rise.
Yet, numbers like these are not a genuine reflection of premiums that Zimbabweans have been subject to. Moreover, this is inflation which will not be recognised by the local government. It can also be argued that talk of 600% premium rates is a reflection of the USD black market rate that is being held in EcoCash as the government has frankly made this worthless.
Zimbabwean crypto fans should not expect to have to pay these astronomical fees to purchase bitcoin in the future, which will enable the nation to continue its progress within the bitcoin movement.