Mthuli Ncube, the newly appointed Finance Minister of Zimbabwe, stated recently that it is part of his plans by pushing the adoption of a “cryptocurrency unit” for the country to invest in. He plans to pitch this idea of the Central Bank of Zimbabwe, aiming to combat the hyperinflation seen in the country’s fiat currency.
The country has been facing major problems with the value of its fiat currency, as it faces a slow devaluation into the territory of not being worth anything. General sentiment in the currency has also been on the decline for the population, and 3 attempts to devalue it have still not been able to rectify the issue.
Moreover, the country is facing issues with declining exports, leading to a depletion of the nostro accounts maintained by banks and financial institutions. The Treasury has also over-issued Treasury Bills to finance the spending of the government, leading to the population to pay the price. Banks have also cut down the on withdrawal limits, effectively locking money up only to be released into the economy at a slow pace.
Ncube, in a statement to ITWebAfrica, said:
“Zimbabwe should be investing in understanding innovation and often central banks are too slow in investing in these technologies. But there are other countries which are moving faster, and if you look at the Swiss Central Bank, they are investing in, and understanding, Bitcoin.”
He went on to illustrate examples of utilizing Bitcoin in Switzerland, such as using it for travel. Moreover, he targeted the young population of Zimbabwe, stating that regulators should “catch up with them”, so as to understand the technology to regulate it.
However, the call for action by Ncube comes at a time where the Central Bank of Zimbabwe is still skittish around the concept of cryptocurrencies. They recently requested financial institutions to avoid cryptocurrency transactions, stating that it was a measure to “protect the public”, and to safeguard the country’s financial system.
The country is moving towards replacing cash with other alternatives such as EcoCash, OneMoney, TeleCash, and other e-money alternatives. This is reflected in statements made by the former Minister of Finance, who announced that the economy was 98% cashless.
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