According to various reports, the African country of Zimbabwe is suffering from severe economic hardships similar to the inflation and currency crisis in Venezuela. Furthermore, demand for bitcoin is skyrocketing as the country’s only exchange is seeing bitcoin trades at US$6150 per BTC at the time of writing.
Also Read: Increased South African Bitcoin Adoption Highlights Need For Taxation Clarity
Economic Hardship Causes Bitcoin Prices to Soar on Zimbabwe’s Trading Platform Bitcoinfundi
Zimbabweans are dealing with an economic crisis at the moment, as the country is seeing a wave of food and fuel shortages across the country. The nations’ currency is practically worthless, and Zimbabwe’s central bank is draining the reserves of individual forex markets. This is leading the country’s citizens towards finding alternative stores of value like hoarding gasoline, food and medical supplies, certain commodities, and now the digital asset bitcoin.
For instance, the country’s lone bitcoin exchange Bitcoinfundi has seen bitcoin trades at an 85 percent premium. Earlier this week, one bitcoin reached a high of $7200 on the trading platform and the current price per BTC on the exchange is $6150. The prices on Bitcoinfundi have been well above the $4200 global average. However, Zimbabwean Localbitcoin’s BTC prices are roughly the same as the global weighted average, with a much smaller premium. Even though there are Localbitcoin sellers available, the shortage of physical cash leaves only a few trading options on the table for Zimbabweans. Citizens in Zimbabwe using Localbitcoins have to use alternative payments like Skrill, Moneygram, or Paypal.
Some Believe Zimbabweans Could Benefit from Bitcoin
Zimbabwe’s economy has been suffering for years, and during this time many individuals and organizations suggested that bitcoin could help. Last year the Zimbabwe-based economist, Philip Haslam, explained that he believes Zimbabweans could benefit from bitcoin. “The thing about bitcoin is once you import it into the country, you don’t have the problem of the currency eroding and perishing like you have with notes — It’s a system that allows for privatized banking,” Haslam explained.
Furthermore, the wallet provider, Bitmari, has been spreading cryptocurrency awareness across the country as well. Bitmari is also working with female Zimbabwean farmers and helping them raise bitcoin to help with the farming efforts. Bitmari’s payment platform also claims to significantly lower the cost and increase the speed of remittance payments throughout the African Diaspora through bitcoin. The company recently partnered with a well-known African financial institution, the Zimbabwe Bank of Agriculture.
Zimbabwe’s Failing Economy Will Take Time to Improve, but the Country’s Citizens are Listening to Bitcoin Proponents
Zimbabwe’s economic situation seems like it will get worse, before it gets better as investors in the country are removing themselves from Zimbabwean-based assets. Furthermore, citizens are dealing with serious currency problems with the government’s bond notes, and the USD has three different values within the country. As the country continues to deal with economic hardships, many Zimbabweans believe bitcoin could be the answer to their problems. Gauging by the current demand for bitcoin in Zimbabwe, they are probably right.
What do you think of Zimbabwe’s failing economy and the country’s bitcoin demand? Let us know in the comments below.
Images via Shutterstock, Newzimbabwe.com, and the Bitcoinfundi index.
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