The relationships between African countries and cryptocurrency have always been on the radar for analysts and anyone remotely interested in the developments of crypto. Africa’s money transfer culture along with widespread internet growth have promised it to be a great beneficiary of crypto. However, not all Africans have a crypto wallet, even though brands like Luno offer a solid bitcoin wallet solution that is readily accessible in the market place.
Zimbabwe is an especially interesting case study when it comes to the presence of Bitcoin in an unregulated state with severe economic problems. This will be the focus of discussion here. Read on to find out why Bitcoin is growing in Zimbabwe.
Zimbabwe’s Economic Unrest
Zimbabwe has been subject to USA sanctions which have recently been renewed by Donal Trump. Many other African leaders had pleaded with the Trump administration for the sanctions to be lifted. Yet, they remain in place because the US believes Zimbabwean laws that block media freedom and prevent protests are unjust. The sanctions imposed have caused living standards to drop and hyperinflation widespread throughout the country.
Many locals countered the volatility of their local fiat currency by holding foreign currencies which were far more stable. For example, instead of using the local currency, residents of Zimbabwe turned to US dollars, Pound Sterling and Euros to hold a more stable wealth. This was where Africa’s money transfer culture shines through as the savviest among society were making transfers regularly to keep their wealth intact.
Zimbabwe Bans Foreign Currency
As a result of their flailing local currency, workers have been calling for salaries to be paid in foreign currency. However, the Zimbabwean Government took another route and instead has banned local transactions involving foreign currencies such as the Pound Sterling and US Dollar. With the local currency failing and restrictions in place to tackle the safe havens of foreign currencies, it may have been expected that crypto trading would surge…
What That Means for Bitcoin
Cryptocurrency in Zimbabwe has also not been warmly received by the authorities. Banks have been instructed not to execute payments that are believed to be related to crypto payments or have any involvement with crypto activity. The reason that the authorities have implemented these restrictions is due to protection. They want to protect nationals from scammers and fraudsters who could take their investment and leave them in poverty due to crypto’s unregulated nature in the territory. Some have also suggested restrictions are a way of encouraging more economic activity with the local fiat currency.
Nevertheless, peer-to-peer crypto payments have still been going on in Zimbabwe. Bitcoin remains one of the most popular cryptos in the country, but that popularity soon increased after foreign fiat currencies became restricted.
No longer could locals seek shelter from the economic turbulence with US Dollars and Euros. So instead, they decided to run to crypto as a relatively less volatile and more secure place to store their wealth. Bitcoin is on the rise in Zimbabwe during the current trying times – and that is why crypto products/services are becoming a popular option for those living there right now.
