Bitcoin Price Soars To $13,000 In Desperate Zimbabwe
Content adapted from this Zerohedge.com article : Source
We noted in June that Zimbabwe's cash crisis continued unabated.
Those awaiting cash transfers at a bank may wait a month to be cleared and, even then, the transfer may be refused.
The Standard, Zimbabwe's leading Sunday newspaper, ran an article at the time entitled, "Black market thrives, as banks run dry."
Some highlights from that article:
HARARE'S Road Port has become the unofficial bank of last resort, never short of cash, no queues and a multicurrency platform. The money market at this busy bus terminus now plays the role that the formal banking sector has failed. It is effectively making a mockery of the Reserve Bank of Zimbabwe (RBZ).
This points to the nature of black markets. They thrive based upon fulfilling an existing need, not upon government control. They therefore replace whatever services the official market fails to provide.
"Top government officials, supermarket owners and service stations were behind the thriving black market, which is never short of cash."
And now it appears many Zimbabweans have found an alternate way to store/transfer wealth away from Mugabe's prying (and confiscatory) eyes.
In September we noted the hyperbitcoinization occurring in Zimbabwe. In October, Zimbabwe demand started to impact the global price of the cryptocurrency, and two weeks ago we noted the doubling of the price of Bitcoin in Zimbabwe as uncertainty about the nation's stability sent citizens into a decentralized currency that was out of Mugabe's reach.
image courtesy of CoinTelegraph
Now, after the military coup confirms the average joe's fears, Bitcoin is trading at over $13,000 on Zimbabwe exchange Golix - a premium of over 80% over the USD exchange price as demand surged.
And the order book is full...
Bloomberg reports that demand for bitcoin in Zimbabwe has surged amid a shortage of hard currency.
Golix processed more than $1 million of transactions in the past 30 days, compared with turnover of $100,000 for the whole of 2016, according to data on the exchange's website.
Zimbabwe doesn't have its own currency, with the government adopting the U.S. dollar and South African rand, among others, as legal tender in 2009 after hyperinflation rendered the local dollar worthless.
According to a local trader, bitcoin isn't just being bought by individuals, but by businesses with bills to pay.
Bitcoin, as every bitcoiner would expect, is helping people in the country survive times of economic uncertainty, as Zimbabwe has been embroiled in a crisis for years.
_As CoinTelegraph noted previously, _Zimbabwe is beginning to act like an interesting case study for what happens when a country begins to collapse around its monetary system - it is also being witnessed in Venezuela.
Moving money out of Zimbabwe is starting to become impossible, and as people try and flee monetarily out of the crumbling state, they are finding refuge in Bitcoin.
Soon, banks in Zimbabwe have stated that Visa debit cards would no longer be usable for international payments without prior arrangements and pre-funding with hard currency.
"You will be required to make prior limit arrangements with the bank," Stanbic said in a message to depositors last week.
Econet Wireless has also stopped foreign payments on its MasterCard linked EcoCash mobile money debit card.
Bitcoin as a refuge
Because of the decentralized nature of Bitcoin, there is no impact on it from this political upheaval, in fact, it is only benefiting from it. The Bitcoin premium of almost 100 percent is not because of the political issues, rather the high demand surrounding worry of collapse.
Bitcoin again shows its potential and power when the banking system again shows its potential for mass collapse and hysteria.
Couple this with Venezuela and you see how much of an impact that cryptocurrencies can have. The fact they are decentralized means that no government can affect them. As much as the regulators talk about taking control, they are peeing in the wind.
The more turmoil that occurs in the next 12 months, the more legitimacy that bitcoin and other cryptcurrencies get. And since Bitcoin has the name recognition, it will be the one that benefits.
I live in Venezuela and the Bitcoin arrived as fallen from the sky, cash is scarce enough, inflation kills all your income and savings, and the black market grows quite strongly, sometimes you are charged + 25% for taking out cash.
The BTC allows you to dodge the State like no other, its usefulness is enormous, and many may still not understand that.
Wow. What an amazing story...thanks for the upfront and personal view of what is going on....
I agree I dont think most people are aware of what is going on with those areas where banking and the currency is unreliable. It is something that many take for granted.
A part of me wants to go to Zimbabwe just to check out the bitcoin scene but I know the country is in shambles.
On steemit i can see many educational post and Informational post.This post is also a an informational post,Thank you steemit and Thank you @zer0hedge for sharing this news.
More and more countries are abandoning the obsolete monetary platforms for Bitcoin. It does what fiat currencies cannot.
The true power of Bitcoin shown, other crisis happens and just watch how people jump into cryptos immediately.
That's so sad the way money is scarce in Zimbabwe bitcoin should be the way to go.Arw you from Zimbabwe?
Now people will start to making money in Zimbabwe :)
Great post. All fiat currency is based on faith, that society have in this papers, which does not have real intrinsic value.
Zimbabwe needs an entire overhaul of it's political system and monetary sytem (including it's currency). Hopefully the coup-de-etat is something that wil pave way for this.
Bitcoin may function as a stop-gap arrangement, but it's not a permanent alternative to a stable national currency (which Zimbabwe hasn't seen in many many years.
I truly love reading an article that furthers the fact that crypto can save the world from centralized banking.