“In the world of Bitcoin, countries like Zimbabwe and Venezuela are frequently mentioned as places where the cryptocurrency could or perhaps should be making a difference and where they can really help the people’s economic situations” declared podcaster Anita Posch on Coindesk.
When looking at Google searches related to cryptocurrencies, Africa always comes out on top. Indeed, the population of many African countries seems to be interested in digital currencies such as Bitcoin, because they could allow them to take advantage of a decentralized, independent, fast, transparent, secure, and cheaper monetary alternative.
Moreover, cryptocurrencies represent a solution to fight hyper-inflation in some African countries such as Zimbabwe. In this country, for example, the annual inflation rate has accelerated to reach 837.53% in July 2020 according to Bloomberg, making it difficult to get out of the crisis. Not to mention the lack of liquidity and endemic unemployment that is hitting the country.
All of these factors are hurting the local population, which has to cope with a declining standard of living. This is why many people in Zimbabwe are turning to Bitcoin and Altcoins.
More and more people are also interested in crypto trading as a means of earning an income in a country where so much uncertainty reigns. Crypto trading makes it possible to take advantage of the fluctuating prices of cryptocurrencies like Bitcoin in order to make a profit. It is generally a short-term trading technique that uses the high volatility of cryptocurrency prices and leveraged products to quickly gain on small price movements.
It should be kept in mind that the adoption of cryptocurrencies in Zimbabwe and other countries with difficult political and economic regimes is more intense, as these digital currencies also represent tools to fight restrictive policies and a certain lack of freedom.
For example, on June 27, 2020, the Reserve Bank of Zimbabwe suspended mobile payments and transactions. Mr Mnangagwa’s government explained that it possessed “impeccable intelligence which constitutes a prima facie case whereby the phone-based mobile money systems of Zimbabwe are conspiring, with the help of the Zimbabwe Stock Exchange, either deliberately or inadvertently, in illicit activities that are sabotaging the economy” explains the Financial Times. After this decision, most cryptocurrency platforms in Zimbabwe declared that they noted a spiking demand of cryptocurrencies, especially Bitcoin.
Many desperate and controversial decisions adopted by the government like this one have indubitably pushed people in the country towards Bitcoin. One reason could be to send money abroad. Foreign people are also using cryptocurrencies when remitting money to their home countries. More than just a way to send money, Bitcoin has also become a better way for them to store their money, as they can have a total control over their money and their savings.
“I think that blockchain and crypto could be the savior for Africa in many ways because it brings the power back to the people and brings the security back into the currency system and also allows the people to utilize it in ways where they can advance themselves and not allow government to do those things that are keeping them down” explained Akon, an American rapper wanting to create a crypto-city in Africa.