Bitcoin is increasingly becoming a store of value in Zimbabwe as inflation starts to creep up and prices sky-rocket, with investors ditching monetary assets, experts said this week as the price of the crypto-currency skyrocketed.
Zimbabwe is battling foreign currency shortages and this has resulted in a crippling liquidity crisis. Bitcoin has emerged as a popular store of value and the Golix exchange platform for bitcoin in Zimbabwe says it handled bitcoin transactions worth $1 million during the month of October 2017.
Bitcoin prices in Zimbabwe have skyrocketed to $12490 by Thursday morning compared to global averages of about $6000. There is high anticipation that the price of bitcoin will continue to rise in Zimbabwe as more and more people embrace it owing to difficulties in effecting international payments.
“There is inflation setting in in Zimbabwe and bitcoin is an interesting store of value,” Taurai Chinyamakobvu, a tech and blockchain expert in the country, told CCN.
Officials at the Golix trading platform in Zimbabwe say demand for bitcoin has been soaring. The exchange only facilitates trade and officials say sellers of bitcoin in Zimbabwe accept mobile money and bank transfers.
Yeukai Kusangaya who facilitates trade deals at Golix told CCN in an interview this week that “there is more demand than supply” of bitcoins in Zimbabwe at the moment. The demand is spurred by difficulties in effecting international payments. Banks and mobile money platforms have disabled Visa and MasterCard credit and debit cards for international payments and this has left many people in Zimbabwe stranded.
“Bitcoin can be used to pay for vehicle imports and to purchase goods on e-commerce sites such as Amazon,” said Kusangaya.
Other experts in Zimbabwe say bitcoin, although susceptible to volatility, is a safer bet in terms of investment. Others even tout it as safer than gold in terms of value appreciation. But there are worries over lack of regulation by governments although some jurisdictions may be moving to regulate bitcoin trade.
“There is no owner or controlling body for bitcoin. Every transaction done online is visible to all traders in bitcoin,” Pardon Gatsi, a tech expert based in Harare, the capital city of Zimbabwe, told CCN.
Banks in Zimbabwe frequently run out of notes and coins and the introduction of bitcoin has been some solution amid reports that some companies are now embracing bitcoin for payments for software among other goods and services.
Traders and those seeking to effect international payments will be hoping that bitcoin price remains high and that the central bank or other government authorities do not move in to regulate the crypto-currency.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:09 AM UTC