By Anyone who has read a newspaper in the last thirty years knows that Zimbabwe’s had some serious issues including being one of the poorest nations in the world.
Things do however seem to be getting better for them. Robert Mugabe is no longer president and their latest finance minister seems to have some pretty radical and forward-thinking ideas for solving some of the nations cash problems.
It’s been just under two weeks since Mthuli Ncube was selected as Zimbabwe’s most recent finance minister and already the new chairman of the treasury is touting ideas of cryptocurrency as the answer to all and of course this set him on a path of potential destruction with the country’s central bank.
Ncube has on several occasions made example of how Switzerland’s central bank has taken a more progressive approach on Bitcoin and various other digital currencies saying that Zimbabwe should follow by this example.
“One can pay for travel using bitcoin in Switzerland. So, if these countries can see value in this and where it’s headed, we should also pay attention,” Ncube said. “We have innovative youngsters so the idea shouldn’t be to stop it and say don’t do this, but rather the regulators should invest in catching up with them and find ways to understand it, then you regulate it because you now understand it.”
Several banks in Zimbabwe are currently implementing caps on amounts that depositors are allowed to withdraw and this has been made worse by the fact that many savers are inclined to hold onto the cash instead of entrusting it with the banks.
As Zimbabwe’s economy falls deeper into the dollar’s hold, the current cash shortages are becoming increasingly worse due to the fact the foreign currencies are also dwindling.
If Ncube sees success in his plight to convince the central bank and other powers that be including the RBZ, to set up a cryptocurrency unit this would be a complete turnaround on the central bank’s current anti-crypto stance. Earlier in the year in May, it was reported that banks in Zimbabwe were strictly prohibited from processing cryptocurrency transactions and this goes for both investors and traders of the nascent asset class, citing various risk and dangers that come along with them including the use of cryptocurrency as a means of money laundering.
“Further, cryptocurrencies can be used to facilitate tax evasion as well as an externalization of funds in violation of a country’s laws,” the RBZ wrote in a circular to financial institutions back then.
Even though the High Court in Harare has since revised this ban, it has left a regulatory uncertainty in the mouths of investors and thus some of the cryptocurrency exchanges such as Golix have left the country in order to explore other African countries in an effort to avoid an overreliance on the shaky Zimbabwean market.
Could the adoption of cryptocurrency be the answer to Zimbabwe’s cash problems? What are your thoughts? Let us know by commenting below.
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