Zimbabwe's President Robert Mugabe resigned yesterday, and as Zimbabweans embrace change, it's all the more apparent that Bitcoin has been the crisis currency of choice for the country. Moving ahead, cryptocurrencies in general may increase in importance for this African nation long beset by political dysfunction and crippling inflation.
Over the last 12 months, Zimbabwe has been experiencing increased political uncertainty, and local Zimbabweans have been turning to Bitcoin to help buy daily goods and essentials, as well as using it as store of value.
Why did Zimbabweans turn to Bitcoin? Mostly because it is a virtual currency that is decentralized and not controlled by any government. It's not beholden to the vicissitudes of political instability within a particular nation.
Now Zimbabwe is looking forward to a new chapter in the country's history and a renewed economic vitality. Mugabe has presided for 37-years over the deepening economic crisis in Zimbabwe, where people are on average 15% poorer now than they were in 1980.
But Zimbabweans aren't turning to Bitcoin alone.
Crypto Dash announces joint venture KuvaCash
Cryptocurrency Dash has now been made available to locals in Zimbabwe. Dash is a digital currency for payments and has announced a joint venture with KuvaCash, a program claiming to have a solution for Zimbabwe's ballooning inflation, collapsing currency and declining national economy.
KuvaCash is currently pursuing a money exchange and remittance license in Zimbabwe and the project is expected to receive government and reserve bank backing.
Dash has experienced explosive growth in 2017 and in the past two weeks, Dash has surged from $290.74 per Dash to $519.42, a 178% increase. Dash's undertaking with KuvaCash is a $550K deal funded directly by the Dash treasury via its unique governance model. Dash says it aims to provide Zimbabwe with its first-ever peer-to-peer localized cryptocurrency payment service for anyone with a phone-number-based messaging system.
The group states that currently locals wait hours in bank lines to access their money and are experiencing exorbitant fees on transactions. The Zimbabwean government has tried to address the crisis by issuing bond notes matching the price of the U.S. dollar as a fix, but this remains a stop-gap measure, rather than a permanent money system.
"I have been advocating for quite some time the potential benefits Dash can provide to economies with less stable currencies, and Zimbabwe seems a prime location for these benefits," said Dash Core CEO Ryan Taylor in a statement. "This project in particular is well-researched with value propositions, branding, and go-to-market strategies tailored to the local market. Combining the ideal network - Dash - with a well-considered strategy should lead to a high probability of success."
Set to launch in Q2 of 2018, KuvaCash will introduce a cash replenishment model allowing residents to cash out their digital currency into U.S. dollar fiat at any time, greatly reducing transaction fees and providing enhanced financial security and liquidity.
"The informal economy has U.S. dollars in circulation, but they are no longer being managed by banks and are physically quite dirty," said Andreiko Kerdemelidis, KuvaCash finance and technology director. "People are scrubbing bills and hanging them up on clotheslines to dry, selling the cleaner bills at a 10 to 20% markup."
"We don't know what the long-term plan is for these notes but it is fair to say that Zimbabweans currently prefer U.S. dollar bills to extant mobile-phone based payment solutions or bond notes," Kerdemelidis added. "KuvaCash will give locals an ideal alternative to improve their ability to do business and buy everyday goods and services without hassle, overpaying on fees, and using secondary markets. The people of Zimbabwe deserve a far better solution and we plan to give it to them."
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Editor's Pick: Story originally published Nov. 22