Following over a decade of economic turmoil, Zimbabweans are turning to bitcoin for some financial stability. Yes, you read that correctly! I mean, seriously, just how messed up is that? As a result, bitcoin is reportedly selling in the capital, Harare, for almost double the global average, according to TheNational.ae.
I Thought Harare was That Gorilla Meme…
From our ivory tower perched high on Crypto Mountain, we often look down at the mere mortals below. We chuckle amongst ourselves at their fiat-controlled lives, then remember the deadline we must hit on our latest ICO article.
We scurry off back to our typewriters and give no further thought to countries who generate neither headline nor paycheck… until now.
They Have Bitcoin in Zimbabwe?
Yes, of course they do. Although they don’t actually have a national currency of their own, having replaced it with the US dollar for all daily transactions back in 2009.
The problem back then was that the government ran out of money, so it couldn’t pay its civil servants, the police, and the army… and two of those groups have guns. To avoid an angry, unpaid, gun-wielding mob, the government decided to quietly print a load more cash to pay them off.
Cue the crashing devaluation of the Zimdollar, hyperinflation, and empty supermarket shelves. This resulted in the HODLing of everything from bread to gasoline to shampoo. It also led to the loss of one of the pre-crypto-era’s best named currencies.
So Did the US Dollar Fix It?
For a while, yes. But as only the US mint (and my mate Dave who lives above a pizza delivery shop) can print that kind of dollar, there was still a problem. Zimbabwe had to import them. Lots of them. 10 million a week.
Zimbabwe has changed from a country in which everybody had plenty of (worthless) cash but nothing to buy, into a country with plenty on sale but no cash to buy it.
Hence the country has now shifted its focus to bitcoin, not for investment purposes, but for day-to-day transactions. A bit like what it was designed for.
And Are They Really Paying Double?
According to local exchange golix.io, they are. I should also note that while writing this article I have watched the BTC/USD price on this exchange go from $9000 to $9999.99.
But armed with my investigative journalist hat, and my willingness to capitalize on the misfortune of others, I decided to look further into it… Basically, I went on LocalBitcoins Zimbabwe with the hope of selling the BTC dust I have for a vastly inflated price.
No dice. The selling price was exactly the same as in the UK, as was the seller at the top of the list. I did notice some inflated prices on a city by city basis further down the list, but nothing that I could take advantage of… ahem, nothing more than an opportunist scam, preying on those who needed to trade in cash.
I’m not sure if golix.io do cash trades, but I’m imagining not. So are they just scamming the uninformed and the unwilling to search for a better deal? Either way, it’s not a very professional way to do business.
What do you think is causing the hyperinflated price of Bitcoin in Zimbabwe? Is it a matter of demand outstripping supply or are some places simply trying to take advantage? Let us know in the comments below.
Images courtesy of LocalBitcoins Zimbabwe, Shutterstock, Reuters