An insight into the state of Bitcoin in Zimbabwe

An insight into the state of Bitcoin in Zimbabwe

Bitcoin in Zimbabwe is continuing to gain acceptance and has been seeing wider use as a currency. In a part of the last quarter of 2017 Bitcoin (BTC) has been trading constantly at almost double the average price on the international market. Quite positive in terms of adoption, the developments seem to confirm the Bitcoin Market Potential Index’s assessment which ranks Zimbabwe third due to the country’s informal economy, and history of financial crisis, conditions which are huge factors for Bitcoin adoption, Argentina and Venezuela which are high inflation countries are first and second on the index respectively.

The digital currency is yet to gain official acceptance by the financial Industry regulatory authority, RBZ, and last year the ‘government’ refused to recognize BTC along with other Crypto-currencies. Creator of the Bitcoin Market Index Dr Hilerman has pointed out that Bitcoin tolerance from a country with a fragile financial system trying to maintain capital control policies shouldn’t be expected at all, suggesting that the Zimbabwean government should even consider banning Bitcoin exchange, a situation that will be similar become similar to China’s. However, other Bitcoin analysts have noted the improbability of the scenario because of an estimate of the huge financial resources required to enable the ban.

Yet economic and tech enthusiasts in Zimbabwe hope that the RBZ would soon discover the usefulness of crypto-currencies especially BTC, saying that “intensification of trade in BTC with no reductionism to the country’s currency woes, the RBZ and the government might revise its position by taking on a more active role in cryptocurrency trading.”

Bitcoins in Zimbabwe are mainly being used to pay for goods on the international market, other lesser uses include the normal peer to peer transactions within the country’s economy,  keeping value in the form of an investment in the digital asset. The reasons of acute shortages in foreign currency to pay for goods outside the Zimbabwean markets, the various restrictions set by the formal banks in Zimbabwe, and the general challenges associated with making payments in foreign currency have been cited as the main cause for the uptake of Bitcoin in Zimbabwe. People of various ventures looking to make ‘international transactions’ have simply embraced Bitcoin which is not subject to RBZ measures as a reliable way of accessing foreign markets for raw materials, products on E-commerce stores like Amazon and BeForward. And, although keeping value has been met with skepticism, with some detailed crypto-currency analysts developing the greater fool theory that explains an imminent BTC bubble, BTC in Zimbabwe is bought so that it can later be sold at a higher price or worse, or better, ‘immediately’ for example if a trader has ‘means’ to source Bitcoins on an international BTC trading platform and transfers to a Zimbabwean platform they will fetch a profit from the premium mark up. For example they buy BTC worth $7500 and sell it for $13500 on a Zim trading platform same-day double the profit $6000 (trouble is finding means within Zimbabwe to buy BTC on ‘international platforms’).

The result of an increase in international transactions in BTC has been the surge in the prices of BTC on the market in Zimbabwe and increased volumes of BTC transactions. All along in the past 2 or 3 years the price had steadily increased at par with the international prices starting in September 2017, the Zimbabwean cryptocurrency exchange BTC traded for as much as $7.200 per Bitcoin and has since remained trading at a premium of 85% from the BTC price on the international market. On 29 October the price for Bitcoin in Zimbabwe surpassed the $10 000 mark, and the development received worldwide media attention.  As of early November, the price increased to notable figures of $11500, $12500 and $13500 and recently with the international price surge, reached $15 500 per BTC in the midnight of November 18, maintaining the 85% premium. Forecasting randomly, as long as Zimbabwe continues to face challenges in making international payments because of the shortages in foreign currency, BTC on the current country’s market will continue to trade on the much higher premium with regard to the continued need of accessing goods and services on the international market, and trading BTC as a currency for profit.

The increase in BTC trading, prices, and trading volumes has had a positive impact on the few Zimbabwean cryptocurrency startups, remarkably, Golix which recently rebranded from Bit-finance in the month of October 2017 reportedly processed $1 000 000 worth of transactions in total historic value against their 2016’s annual total of $100 000 and from their November order book, possibly the amount might even surpass that of October.

Also, notably Cricket Zimbabwe, more formal organisations have been considering trades in Bitcoin and trading businesses willing to make financial transactions in Bitcoin being able to do so through a service like Bitpay, the positive situation might point urge for an even possibility of BTC adoption in Zimbabwe. Recently, the official Cricket Zimbabwe board announced through its Facebook page a partnership with a new financial technology company, Baracoin, which has developed a stable digital currency across Africa. The move might mean Zimbabwe in the near future might see more official organisations and institutions from various sectors embracing digital currencies.

These are some of the places you can find out more about Bitcoin in Zimbabwe

Golix a trading and exchange platform, but has been receiving bad reviews due to inconsistent support.

BitMari a remittance service.

Remitano a trading and exchange platform.

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