How legal and useful is Bitcoin in Zimbabwe, the country which has been faced with a difficult economic situation for decades?
The South African country has some issues with its currency that has almost brought it to its knees. It has found it extremely difficult to move ahead with the plan to revive the economy.
Bitcoin is not illegal
According to Simbarashe Machiridza, who is the compliance officer at Bitfinance, a Bitcoin exchange that serves users across Africa, Bitcoin use is legal in Zimbabwe but it is not a legal tender, that is “... Although it’s not against the law to have Bitcoins in your possession, no one is legally obliged to accept Bitcoins as payment for a debt, goods or services. In other words, you can’t force anyone to accept your payment if you are paying in Bitcoins.”
Zimbabwe has been touted to be a ripe destination for Bitcoin. But so much has changed for the country in the last five to 10 years and the situation seems to be worsening. The Zimbabwean dollar denominations rose to have a 100 trillion dollar bill to become the note with the most zeroes of any legal tender in recorded history. The bills, which still auctions on eBay, circulated for a few months in 2009 when the country experienced one of the toughest hyperinflation in history with $1 changing for trillions of Zimdollar.
Multi-currency regime
As a result of the dwindling economic prospect, Zimbabwe in the past introduced the multi-currency regime where it recognised nine foreign currencies as a legal tender - US dollar, South African rand, Botswana pula, Pound sterling, euro, Australian dollar, Chinese renminbi, Indian rupee and Japanese yen.
It is worth noting that while these adopted currencies belong to certain countries and therefore are governed by the laws put forward by their home economic measures in their respective countries, people in these countries are now trading in exchange for Bitcoin almost on a daily basis.
While the situation has become precarious for people in the country, and laudable Bitcoin-related initiatives are being introduced, it has presented the country as an extremely interesting location for the digital currency to flourish as it has some indications of making life easier for the citizens.
Going by the words of the co-founder of Chankura in South Africa, Thabang Mashiloane, which says Bitcoin can empower anyone in Africa regardless of their financial status or educational background to participate in the global financial markets, by a way of buying stocks in Wall Street, several Zimbabweans could reach out to the outside world yet and be able to draw the flow of foreign trade into their economy.
Just like Thabang, who says that an African farmer can be able to trade freely without any hustle with anyone in the world using Bitcoin and smart contracts for escrow services, Machiridza touched on the need for the regulation of Bitcoin as a major factor to move its adoption forward.