Just weeks after Zimbabwe placed a ban on foreign currency in the country, added to the rising inflation facing the country’s economy, the demand for Bitcoin in the country has risen so high that people are willing to pay a premium price on LocalBitcoins.com in purchasing the cryptocurrency.
In Zimbabwe, Bitcoin is pricing up to $104,000 per coin, a premium of almost 1000%. This price against the $10,000 which Bitcoin is hovering around has ensured a pathway for a huge boost in business for cryptocurrency traders in the country.
All this comes after the Zimbabwean government reinstated the Zimbabwean dollar, a currency abandoned in 2009 after it saw almost up to 500 billion percent inflation making it worthless. After less than a month, the reinstated Zimbabwean dollar experienced a 175% inflation raising eyebrows and fears of another incidence of hyperinflation in the country.
These trend of events comes just around the time the government also banned the use of foreign currency in domestic transactions. All this seems a blessing to many cryptocurrency exchanges which were greatly affected after the Zimbabwean government some time back banned banks from dealing with them. Confidence Nyirenda, the director of Golix Crypto Exchange made mentioned that the situation would be a great benefit for the business. He also said that though there’s still the underlying scare of getting scammed among the locals, they have a mapped pit solution on how to handle the issue.
Zimbabweans see Bitcoin as a way to preserve wealth as their currency is falling to shambles. A local, Dennis Kadengu said he has been buying as much cryptocurrency as he can afford. In his opinion, Bitcoin is the safest cryptocurrency and in terms of safety, one can have large amounts of money in equivalent dollars or euros and carry it around easily without any hustle.
Prosper Chitambara is however of a different perspective as he preaches the gospel of caution when dealing with cryptocurrencies. Prosper is a member of the Labor and Economic Development Research Institute of Zimbabwe and his argument is that cryptocurrencies are Volatile and unregulated. In his opinion, unless there’s an infrastructural regulation around cryptocurrencies, full-scale adoption in the country would be almost impossible.
However, despite the certain risks about cryptocurrency pointed out by prosper, locals like Dennis Kadengu would still prefer Bitcoin, especially over the almost worthless Zimbabwean Dollar.