This is an opinion from Thabo P. Ncube, a Bitcoiner who suffered from hyperinflation in Zimbabwe in 2008.
The Reserve Bank of Zimbabwe (RBZ), the country’s statutory custodian and lender of last resort, recentlyeditedIn bragging about it too much Forex auction trading system In the hope of selling foreign currency at exchange rates determined by the market through regulated banks.
Zimbabwe It uses a multi-currency systemAnd With the dollarization of 80% of its economyAccording to economists. The black market rate of the US dollar (USD) was recently double or higher From the official price subsidized by RBZ.
In January 2023, the local Zimbabwean dollar (ZWL) was trading at approx From $705 to $1 ZWLBut on June 7, 2023, just after the bank pivot, the official price was approx ZWL from 4868 USD to 1 USD. Just a day ago, the black market rate was reported ZWL from $7,000 to $1.
Meanwhile, the rate of inflation was measured on a monthly basis in Zimbabwe 15.7% in May 2023while the annual inflation It is estimated that it reached 75.6%..
Professor Steve Hanke of Johns Hopkins University recently measured the annual inflation rate in Zimbabwe at 1,298%, the highest in the world.
I believe that these painful developments, and many others, have opened the door to Bitcoin adoption in Zimbabwe, and no one and no institution will be able to stop it.
In the aftermath of the financial crisis
For most Zimbabweans, 2023 should feel like déjà vu all over again.
In 2008, at the height of another financial crisis, Zimbabweans lost their savings when inflation reached world records (79.6 billion percent) Many, myself included, had to carry bundles of cash just to buy food necessities in long lines.
the country has stabilized somewhat,National unity governmentbetween the ruling party and the main opposition party after a disputed and violent election. the The nation has fully adopted the dollar It was minted as the only legal tender. Public or private sector employees who have worked for 30 years and sometimes lost their savings due to the collapse of the entire economic infrastructure.
ZWL’s worth of trillions has evaporated leaving many in despair. To this day, many Zimbabweans prefer to keep their money at home, which is affectionately known as “mattress banking,” because financial institutions, government bureaucrats, and politicians fail them. Who can blame them?
But many miles away, where Zimbabweans were still understanding their new normal, Satoshi Nakamoto was a pioneer of Bitcoin. Not only would this be a revolutionary way to handle and store value, but in the future, it could be a way for ordinary Zimbabweans to avoid the painful memories of 2008 and the many failures of government and fiat currencies.
Ongoing crises
Since 2016, another crisis has loomed.
RBZ Introducing “bonds” and “coins” To help change when making transactions. Only US dollar notes were available in the market and coins were hard to come by. Experts warned that this was the resurrection of the ZWL, but the RBZ He denied it and defended himself – Current Governor John Mangudia, He even promised to quit if this scheme didn’t work.
Despite evidence that it does not workMangodian I was given another period and the ZWL was fully revived by June 2019. Zimbabweans have lost their savings again as the government passed legislation stating that ZWL is equal to the US dollar in their bank accounts. The forex black market has been revived and people are starting to pay a premium for US dollar notes outside of the regular financial sector. Zimbabweans have once again been lied to by people who claim to have their best interests at heart.
But they learned their lesson, and by early 2018, so was Bitcoin in Zimbabwe Trading at a premiumAt one point it reached $17,875 while the worldwide price was closer to $10,000. People have been looking for ways to store their hard-earned money in value and bitcoin has proven to be a viable solution.
But in May 2018, Bitcoin has been effectively banned in the country All financial institutions have been instructed to stop transactions related to Bitcoin. This killed almost the entire local Bitcoin community and sent many people looking for unconventional ways to get BTC.
In June 2022, RBZ takes place Gold coins were introduced as a store of value. By May 2023, It was also offering a gold-backed digital currency. This was a clear indication that the local currency was racing to the bottom again.
More than 90% of the tokens and gold were purchased using ZWL And It can be awarded after a certain period in US dollars. This seemed like a good way for the elites to stock up on the low currency in gold while the rest of the population watched the ZWL collapse each week.
Initially, it appeared that the gap between the supply and demand of US dollars in the market continues to widen and that the major banks’ methods of carrying the local fiat currency continue to fail. People don’t trust her methods, and rightfully so. Unfortunately, with governments controlling the mandatory money supply, these kinds of problems, small and large, will continue.
As a result, Zimbabwe may be heading towards another dark period. Recently, the price of a loaf of bread Changed twice in less than a dayfrom $10,000 ZWL to 12,200 ZWL.
To make matters worse, some banks They published statements limiting the use of Nostro accountscausing panic in all areas and Create a potential bank. Nostro accounts are the zimbabwean versions of Foreign currency accounts, which became necessary as the government and private employers took to paying portions of employees’ salaries in US dollars, along with the highly inflated ZWL. Now, it appears that government payments are not backed by real money on hand.
way to preserve value
Against the backdrop of all this, bitcoin has once again emerged as a valid method for preserving value.
via VPNs, which can be used to access exchanges that are banned in the country; Light exchanges that do not rely on KYC or KYC around the world; and peer-to-peer networks Through WhatsApp and Telegram, Zimbabweans are finding ways to access Bitcoin. Bitcoin offers security, absolute scarcity, accountability through a public ledger, and more than anything else for those in Zimbabwe, a store of value. Bitcoin puts control of an individual’s destiny in their own hands and that’s just perfect for a lot of Zimbabweans, who won’t have to depend on politicians and bureaucrats for their economic survival. more than anything. Bitcoin is independence, freedom and individual sovereignty.
Bitcoin represents more than good money in Zimbabwe, and no political government can match its standards and safety. And this time, RBZ won’t be able to stop bitcoin, as people have discovered ways to live in the safety of bitcoin outside of regulated financial corridors. Bitcoin now!
This is a guest post by Thabo P. Ncube. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.