The black market has become the unauthorized bank of last resort, never short of cash, no queues and a multi-currency platform. Today the US$100 or US$50 note is sold for $108 or $54 respectively in bond notes.
According Former Finance minister Tendai Biti, Zimbabwe had a total of $5 billion in deposits but only 5% cash was in circulation instead of 35%, creating the shortages that have hit the economy.
What if Zimbabwe officially adopts Bitcoin as its currency?
Adopting Bitcoin as a national currency and not just as a payment instrument or a personal investment hence can yield noteworthy advantages, both to individual citizens and the governments. These advantages may not be immediately apparent and they certainly require a tectonic change of perspective, but they will gradually become evident with small steps toward adoption in the country.
A StockTwits user, the world’s largest financial communications platform for the investing community, by the name of Charlie Bilello noted that a $10,000 investment in Bitcoin made in July 2010 would have earned investors a $200 million in return.
To be exact, a Bitcoin investor who purchased $10,000 worth of Bitcoin in 2010 would have earned $201.56 million.
In contrast, an investor who purchased $10,000 worth of gold in 2010 would have experienced a negative return of $9,981.
Since July of 2010, Bitcoin has outperformed the Japanese yen, Canadian dollar, Euro, Silver, Gold, US Dollar, bonds, global stocks, US real estate and US stocks.
Bitcoin has shown amazing, and fairly steady growth over the last year.A single bitcoin was worth just $455 in May 2016. And even after reaching a record high on Thursday of $1,800 per token, it has shown a stunning 286% annual return, based on prices from CoinMarketCap.
The main reason why Zimbabwean banks have not adapted bitcoin is that RBZ does not understand bitcoin at the current moment. Techunzipped has heard from three banking CEOs that they were looking into the currency but Reserve Bank of Zimbabwe told them to stop , since they don’t recognize bitcoin as a currency.
Most banks are not concerned with financial inclusion and prefer to charge higher fees in places where financial services are harder to access, taking full advantage of their monopoly in under-banked regions.
Bitcoin is transparent, impossible to forge, more fungible, divisible, exchangeable and transmittable than dollars, unlike gold, it has a firmly capped and fully disclosed supply. But that’s just the beginning!
When a national government adopts Bitcoin, it is demonstrating remarkable restraint and accountability. It is the ultimate demonstration of provable trust. The government will no longer be able to water down citizen wealth by introducing funny currencies, nor borrow against unborn generations.
More importantly, Bitcoin’s ownership is clearly portrayed with the utilization of cryptography. Hence, Bitcoin can’t be seized by Reserve Bank because the Bitcoin network itself is decentralized and unalterable.
One of the key factors that make bitcoin attractive is that it allows you to send money across borders without paying the steep fees charged by traditional gatekeepers like Western Union, MoneyGram or Mukuru.
According to 21.co, the cheapest transaction fee for a Bitcoin transaction is currently at around $0.50, or 0.0003616 btc.
But bitcoin is not only about cheaper remittances. It also gives people access to a growing number of financial services including e-commerce, peer-to-peer loans, and money management platforms, provided they have access to an internet connection.
Can Bitcoin help citizens in developing countries achieve financial prosperity?