Several sources have confirmed that the African country of Zimbabwe is currently experiencing its worst economic crisis yet. Economic experts have likened it to the inflation and currency crisis currently happening in Venezuela.
As the country's economy plunged to unprecedented lows, the demand for bitcoin reached an all-time high. Bitcoin is currently trading at $6,150 USD per BTC.
Zimbabwe has been in economic turmoil for quite some time now, but this latest crisis has seen a new wave of food and fuel shortages across the country. The national currency, the Zimbabwean Dollar (ZWD), is close to worthless. At the same time, the Zimbabwean central bank is draining their reserves of individual forex markets.
The Zimbabwean economic crisis has led increasingly desperate citizens to find alternative sources of value and many have begun to hoard gasoline, food, medical supplies, commodities, and now bitcoin. The country’s main Bitcoin exchange platform, Bitcoinfundi, has taken advantage of the rising demand and is selling Bitcoin at an 85% premium.
Earlier this week, a single bitcoin reached a high of $7,200 on the platform, while the current trading rate is $6,150 per BTC. The selling prices on Bitcoinfundi are much higher than the $4,200 average across the globe.
While Zimbabwean Localbitcoin prices are much closer to the global average, this is not always a viable option for Zimbabwean citizens. Localbitcoin sells bitcoin at a smaller premium, however the lack of cash in the country severely limits the trading options for Zimbabwean citizens. Currently, if a Zimbabwean citizen wants to use Localbitcoins, they have to use alternative payment methods such as PayPal, Skrill, or Moneygram.
Zimbabwe’s economy has been slowly declining over the past few years, and many financial experts both within and from outside of the country have speculated that Bitcoin could be instrumental in stabilizing the country’s economic crisis.
In 2016, Philip Haslam, an economist based in Zimbabwe, expressed his firm belief that Zimbabweans could benefit from Bitcoin. According to Haslam, citizens can benefit due to the fact that once the currency is imported, there is no worry about the currency diminishing in value. This system will finally allow Zimbabweans to have a system for private banking.
Bitmari has also been working to spread digital currency awareness throughout the country. Bitmari has been collaborating with Zimbabwean female farmers to help them raise Bitcoin for their farming endeavors.
Bitmari’s latest platform also claims to have lower costs, while also offering faster remittance payments via the African Diaspora using Bitcoin. Bitmari has also recently entered into a partnership with the Zimbabwe Bank of Agriculture.
It is likely that Zimbabwe’s economic crisis will only get worse. Most investors in the country have been distancing themselves from Zimbabwe-based assets. In addition, citizens have been experiencing increasing issues with the bond notes issued by the government. Currently, the US Dollar holds three different values within the country.
Many Zimbabweans have been turning to bitcoin, believing that the digital currency would have the power to bring some stability to the country. Judging by the increasing demand for bitcoin, it is likely that Zimbabwe might embrace bitcoin in the future in order to achieve a more stabilized economic future.