Over the years, Zimbabwe has changed its position on the pioneering cryptocurrency. The government has already held talks with the private sector to carry out the project.
Zimbabwe might evaluate the adoption of Bitcoin (BTC) and other cryptocurrencies as legal means of payment. That African country, which has one of the highest inflation rates, is consulting experts in the field.
Charles Wekwete, head of the e-Government technology unit, said that they are already consulting the private sector for the project. The official explained that the government seeks to gather opinions from various sectors of society to formulate policies. The Finance Minister and the Reserve Bank of Zimbabwe have spoken out as they consider it a complex area.
Wekwete pointed out that cryptocurrencies cause fear in Zimbabwe, for which they want to understand the implications of the emerging market. He highlighted that those currencies are a fundamental departure from previously known financial instruments.
For that reason, he invited private actors who know how to handle cryptocurrencies to meet with the government. Furthermore, he stated that the government of Zimbabwe is willing to consider the use of those assets.
The Zimbabwean military man did not provide details on what the government is doing to adopt cryptocurrencies. He just said that many governments worldwide still do not have a good understanding of those assets.
Bitcoin Would Not Be Legal Tender but a Means of Payment
The news that Zimbabwe would accept Bitcoin and other cryptocurrencies as a means of payment went viral in recent days. However, the government of that country clarified that it would not adopt any cryptocurrency as legal tender.
The Zimbabwe Ministry of Information, Publicity and Broadcasting stated that the government is not considering introducing another currency into the economy. In that regard, they highlighted that the inflationary Zimbabwean dollar (ZWL) is still the legal tender.
However, the official did not deny the possible acceptance of Bitcoin as a legal means of payment. In several countries, cryptocurrencies coexist with fiat currencies, which seem to work well in contrast to the Zimbabwean dollar.
These Are the Reasons Why Bitcoin Could Work in Zimbabwe
If Bitcoin becomes a means of payment in Zimbabwe, the fees and rates for money transfers would be negligible. That advantage would ease the burden for those living abroad who want to send remittances to their families.
The Zimbabwean economy has undergone a process of dollarization (use of the US dollar) whereby the population rejects the local fiat currency. For that reason, citizens try to save their funds in other assets, where Bitcoin comes to the fore.
Many consider Bitcoin a store-of-value asset that could help Zimbabweans hedge against the economic crisis alongside the US dollar. Its decentralized and anti-inflationary features could help it become an effective means of payment in that troubled nation.
Bitcoin is a solution that can provide the financial stability that Zimbabwe needs to avoid going into crisis. In contrast, fiat money and the traditional economic system contribute to keeping inflation dormant.
There is a high acceptance among Zimbabweans, who recognize BTC as a financial tool to protect them. It is only a matter of time before seeing what the authorities of that African country will decide about it.
By Alexander Salazar
