Like most of the world’s, Zimbabwe ’s economy is in shambles. A gold coin might be the way to go. This might be the case. The country’s central bank announced “the “Mosi-oa-tunya” coin, named after Victoria falls.” It’s Zimbabwe’s response to a dire situation. According to Reuters, “annual inflation, which hit almost 192% in June, cast a shadow over President Emmerson Mnangagwa’s bid to revitalize the economy.”
In a highly unusual move, Zimbabwe ’s government created both a hedge against inflation and a highly-demanded product. They solved a problem, yes, but it was still a solution. The “Mosi-oa-tunya” coin might just work. “The gold coin will contain one troy ounce of gold and will be sold by Fidelity Gold Refinery, Aurex and local banks,” the article detailed.
While a gold coin may not be bitcoin, it does provide an option for people with analog devices. At this moment, bitcoin technology is not available for everyone. However, everyone deserves to be protected against inflation. And if it’s easy to get to, all the better. Back to Reuters’ Zimbabwe report:
“The central bank governor John Mangudya said in a statement on Monday that the coins will be available for sale from July 25 in local currency, U.S. dollars and other foreign currencies at a price based on the prevailing international price of gold and the cost of production.”
Of course this raises a huge unanswered question.
Why Don’t You Use Bitcoin, Zimbabwe?
The rumors that Zimbabwe may be the second country to use bitcoin for legal tender were first reported almost eight months ago. This is a huge step in the right direction, given how much Zimbabwe has already adopted bitcoin as legal tender. Zimbabwe has banned all forms of cryptocurrency “to protect the public” just four years ago. It was a sensible decision, considering that a new Finance Minister has been formed. Government cryptocurrency unitTo study both the subject and the topic simultaneously.
Africa is primed to adopt crypto. 10-20% banked. Financial inclusion and access are essential. Blockchain is a smart phone that allows you to do this.
— CZ 🔶 Binance (@cz_binance) July 6, 2022
Always available NewsBTC reportedBitcoin as legal tender:
“Now that many citizens are demanding crypto, the government is considering the option seriously. The information was disclosed by one local news outlet.
The news also disclosed that the country is already discussing using Bitcoin as a legal tender – the Perm Sec Brig. Colonel Charles Wekwete also confirmed the information. He also declared that the blockchain offers both positives and negatives.”
As it turns out, Zimbabwe wasn’t ready for hyperbitcoinization just yet. The Reuters article omitted the key. Hidden between the article’s lines was the real story.
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US Dollar Legal Tender
Let’s not beat around the bush. While the gold coins look cool, it’s really what makes this interesting: a five year dollar run.
“Last week, Zimbabwe more than doubled its policy rate to 200% from 80% and outlined plans to make the U.S. dollar legal tender for the next five years to boost confidence.”
For those not up to date with Zimbabwe’s economic history, Reuters provides the cliff notes:
“Zimbabwe abandoned its inflation-ravaged dollar in 2009, opting instead to use foreign currencies, mostly the U.S. dollar. The government reintroduced the local currency in 2019, but it has rapidly lost value again.”
So, the country is no stranger to the U.S. dollar and it’s about to lose its local currency again. A country that does not have a currency local to it, such as El Salvador or the Central African Republic. This makes Zimbabwe an ideal candidate for Bitcoin adoption. There’s no rush. It’s not clear if this was in reaction to the “Mosi-oa-tunya” coin news, but Binance’s CEO CZ recently tweeted, “Africa is primed for crypto adoption. 10-20% banked. You need financial inclusion and access. Blockchain provides that with a smart phone.”
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