This is thanks to the country’s hyperinflation issue, when back in 2015 $1 was equivalent to 35 quadrillion Zimbabwean dollars.
There’s a lot of talk at the moment about when bitcoin is going to hit the mainstream, but as a result of hyperinflation and the country’s ongoing political crisis, it seems like it already is in Zimbabwe.
Why are people using bitcoin in Zimbabwe?
Zimbabwe has suffered from hyperinflation the past few years. In 2009, the country switched from using its own currency to the likes of US dollars instead. However, newspapers in the country reported that there was an acute cash shortage, because the reserve bank cannot produce more US dollars, it must rely on the US to do so.
According to the country’s unregulated bitcoin exchange, Golix, these capital controls and restrictions on US dollars are why people are turning to cryptocurrencies.
The political situation isn’t making things much better
Late on Tuesday, military vehicles began rolling into Zimbabwe’s capital Harare. The military has taken over the state broadcaster, several ministers have been arrested and its thought the country’s president, Robert Mugabe is under some form of house arrest too.
Now Zimbabwean citizens will have even more of a reason to stash their money in bitcoin over fears of what is going to happen next.
What else is causing the price of bitcoin to go up?
Bitcoin in the rest of the world edged closer to its all-time high yesterday of $7,876.06. This surge in the cryptocurrency came after Square revealed it was testing bitcoin support in its new app.
Square, co-founded by Twitter chief executive Jack Dorsey, recently launched its payments app Square Cash. It wants to take on the likes of Venmo. A Square spokesperson told CNBC:
“We believe cryptocurrency can greatly impact the ability of individuals to participate in the global financial system and we’re excited to learn more here.”
Revolut, the UK-based challenger bank is also introducing cryptocurrencies. The startup’s head of communications, Chad West, told Verdict it was starting with bitcoin but would introduce other coins including Litecoin and Ether.
“The demand is crazy. We’ve had about 8,000 people who had signed up to pre-register for beta because they want to see it first. In fact, the guy who founded Litecoin even tweeted saying how excited he was for this,” said West.
It looks like bitcoin is edging closer and closer to the mainstream.