Bitcoin and cryptocurrencies were able to reach mainstream attention last year as BItcoin was able to reach near $20K level. Aside from people looking for fast ways to grow their investments, countries have seen the many benefits of blockchain technology.
Despite the many criticisms of cryptocurrencies today, there are countries that have utilized digital currencies at this point. In fact, Iran and Venezuela were able to make their own cryptocurrencies. For Venezuela, they have the Petro that is believed to be backed by oil. Despite the questions whether or not it is really backed by oil, the fact remains that it is sponsored by the current Maduro administration.
Both Iran and Venezuela made use of cryptocurrencies in order to circumvent current US sanctions maximizing the decentralized nature of blockchain.
Can Crypto Solve Economic Problems?
Aside from Petro, Dash is utilized in Venezuela. It has been accepted by businesses considering the hyperinflation that the country is experiencing.
Less than two weeks since the appointment of Zimbabwe’s new finance minister, Mthuli Ncube thinks that cryptocurrencies could assist the southern African country in its economic woes. Ncube promised to encourage the Reserve Bank of Zimbabwe to have its own crypto division. Here, the country will take a closer look at digital assets and understand it better.
Switzerland As Role Model
Ncube looks at Switzerland as the country’s role model when it comes to adopting Bitcoin and other cryptocurrencies. He said that “One can pay for travel using bitcoin in Switzerland. So, if these countries can see value in this and where it’s headed, we should also pay attention”. He also added that “We have innovative youngsters so the idea shouldn’t be to stop it and say don’t do this, but rather the regulators should invest in catching up with them and find ways to understand it, then you regulate it because you now understand it”.
Zimbabwe has put on a cap to how much depositors can withdraw. The country has been suffering from shortage in cash and is worsened by the fact that there are those who don’t entrust their money to financial institutions but instead save it in their own households. In addition to this, the dollar reserves are also dwindling in Zimbabwe.
Setup a Cryptocurrency?
If Ncube is able to convince the RBZ to have a state-backed cryptocurrency, this will be a 180-degree turn for Zimbabwe’s stance regarding cryptocurrencies. In May this year, banks in the country were prohibited from processing crypto transactions over concerns such as money laundering and other illegal activities. The RBZ wrote in its circular during that time that “Further, cryptocurrencies can be used to facilitate tax evasion as well as externalization of funds in violation of a country’s laws”.
In 2018, regulators have taken their stance regarding the crypto industry. However, there is still no general consensus regarding how to handle cryptocurrencies at this point. There are countries such as China that even renewed its interest towards clamping down the crypto industry.
Will Zimbabwe be able to have its own cryptocurrency? Will it be able to solve the problems that the country is actually facing? Or is it going to be like Venezuela?