Zimbabwe and the Cryptocurrency Question

Robert Mugabe, former President of Zimbabwe.

Zimbabwe is notorious for its corruption, poor economic stability, and phenomenal inflation. The African nation came of age in the 1980s, liberated from British colonial rule by the now infamous Robert Mugabe and the ZANU-PF political party. Mugabe introduced economic reforms that have proved to have been disastrous for the country as whole. With increasing emigration, rising prices, and one of the world’s most inflated currencies, could cryptocurrency be Zimbabwe’s saving grace?

Zimbabwe’s official stance

For years, Zimbabwe’s decision-making bodies were averse to the idea of digital currency. This all changed in March 2020, when the Reserve Bank of Zimbabwe considered regulatory frameworks for cryptocurrency companies in its efforts to create a gold-backed cryptocurrency, reports Cointelegraph.

These are all in greater efforts to boost the country’s fledgling economy and financial institutions. Experts have noted that the government’s endorsement and regulation of cryptocurrency through legislation could lead to an increased interest in the market, as well as a blossoming of companies dedicated to furthering the market in the country. If the correct procedures are implemented, Zimbabwe may also reverse its historical pitfalls by preventing corruption and government cronyism. The Reserve Bank of Zimbabwe hopes that an increase in cryptocurrency exchange and usage might stabilise the hyperinflated Zimbabwean dollar.

Cryptocurrency in Africa

Meanwhile, Zimbabwe’s neighbours South Africa and Botswana have both marketed themselves as ideal destinations for cryptocurrency enthusiasts. Both of these countries have started implementing programmes to legitimise and monitor cryptocurrency transactions in their respective countries. South Africa especially has expressed hopes that the boom in cryptocurrency could help the country’s fiscus benefit from increased tax to its coffers, thus bolstering the economy. This is an idea that would help the Zimbabwean financial sector with its growing difficulties in stabilising the fiat currency.

As many developing countries join the cryptocurrency frenzy, Zimbabwe should consider this market a potential boon to its ailing economy.

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Raïs Tarek 87 Articles
Journalist and lawyer, with a passion for global politics, economics and current affairs.