Zimbabwe’s oppressive monetary policy has driven local investors towards the “safe haven” of the decentralized currency, Bitcoin. This development led to an increase in the price of the digital currency to a 600% premium in Zimbabwe. Bitcoin is a decentralized cryptocurrency which isn’t managed by an administrator or bank. Every transaction in this digital currency is publicly registered on the blockchain.
Recently, various media outlets reported a complete ban on foreign currency in Zimbabwe. This harsh monetary policy triggered an increase in the premium for Bitcoin. Currently, the cryptocurrency sells for up to $75,000 in the country. The premium even reached as high as 580% with BTC/USD hovering around $11,000 at press time.
The Zimbabwean government banned all transactions in US dollar early last week. The Zimbabwean dollar which disappeared amidst outrageous hyperinflation in 2018 was reintroduced. The US dollar ban caught the citizens who are dissatisfied with the economic policy unawares. The cash squeeze didn’t go down well with the Zimbabweans.
The Director of remittance service SureRemit, Olaoluwa Samuel-Biyi, spoke on the economic situation. In his comment on June 24, he accused the Zimbabwean government of having faith in economic jargon. He also pointed out that the price and usage of Bitcoin will skyrocket in Zimbabwe.
Since May 2018, Zimbabwe has no cryptocurrency exchanges. The absence of exchange platforms leads to trading on Localbitcoins and other P2P platforms. In 2017, Zimbabwe officially lifted the ban that prohibited cryptocurrencies to legally circulate in the country. During that period, the country was experiencing an economic crisis. However, Bitcoin recorded huge local mark-ups then.
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Bitcoin’s rise has been linked to similar stories at different periods. Such a situation is common in countries like Venezuela where fiat alternatives are unreliable. Consequently, the citizens opted for cryptocurrencies that appears to be more reliable. The CEO of Azte.co, Akin Fernandez predicted a persistent rise of Bitcoin‘s price if the government tries to enforce its ban on foreign currency.
The CEO was expressing his views on the threats by citizens to stage a mass protest if the authorities do not reverse the policy. He suggested that the government should replace USD with Bitcoin to have a glimpse of the future of countries around the world. He also tweeted that the citizens have the right to reject such harsh economic policy. According to him, the state shouldn’t provide money. He remarked that such a service is the sole responsibility of the market.
Despite the unavailability of information concerning Zimbabwe’s Bitcoin’s trading, the cryptocurrency continues to gain acceptance globally. The statistics compiled by Coin Dance, a monitoring resource, showed that the cryptocurrency has hit global volumes in recent records. The surge was led by the decentralized exchange Bisq, formerly known as Bitssquare.
However, last month’s removal of the option to exchange cash affected Localbitcoins. The P2P platform is still losing traffic due to the adjustment on the payment system. Smartereum.com condemned this unpopular decision on Localbitcoins, revealing that competitors are luring traders to other exchange platforms.
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Bisq has recorded success within the week, ending on June 29. It has generated volumes of $10.7 million dollars. The platform recorded $6.1 million in the previous week. With P2P technology, individuals can carry out transactions with Bitcoin.