Like most countries in the world, Zimbabwe’s economy is in shambles. Is gold coin the solution? It just could be. The country’s central bank announced the coin “Mosi-o-Tunya”, which is named after Victoria Falls. This is Zimbabwe’s response to a dire situation. according to Reuters“Annual inflation, which reached nearly 192% in June, casts a shadow on President Emmerson Mnangagwa’s bid to revive the economy.”
In a highly unusual move, the government of Zimbabwe defended against both inflation and a highly demanded product. He created a solution to a problem, sure, but still. The “Mosi-o-Tunya” coin might just do the job. “The gold coin will contain one troy ounce of gold and will be sold by Fidelity Gold Refinery, Orex and local banks,” the article elaborated.
A gold coin is not bitcoin, but it certainly provides a solution for analog ones. At the present time, the technology required to use bitcoin is not available to everyone. However, everyone is entitled to a hedge against inflation. And if it’s easy to reach, even better. Back to Reuters’ Zimbabwe report:
Central Bank Governor John Mangudya said in a statement on Monday that the coins would be available for sale from July 25 in local currency, US dollar and other foreign currencies based on the current international price of gold and cost of production. ,
Of course, this leads to a huge unanswered question,
Why don’t you use bitcoin, Zimbabwe?
About 8 months ago, there were rumors that Zimbabwe could be the second country to adopt bitcoin in an era of legal tender. This was a big step, considering Zimbabwe bans all types of cryptocurrencies “To protect the public” just four years ago. However, considering the formation of a new finance minister made much more sense. government cryptocurrency unit To study the subject around the same time.
Africa has been prioritized for crypto adoption. 10-20% banking. There is a need for financial access and inclusion. Blockchain provides a smart phone.
— CZ Binance (@cz_binance) 6 July 2022
always ready, NewsBTC reported As a fiat-tender rumor on bitcoin:
“Now that many citizens are demanding crypto, the government is seriously considering this option. He disclosed this information through one of his local news outlets.
The news also revealed that the country is already discussing using bitcoin as legal tender – Perm Sec Brig. Colonel Charles Weakwaite confirmed this information. He also announced that blockchain offers both positives and negatives.”
As it turns out, Zimbabwe was not yet ready for hyperbitcoinization. However, the Reuters story buried the lead. Hidden between the lines of the article was the real story.
BTC price chart for 07/06/2022 on Kraken | Source: BTC/USD on TradingView.com
US Dollar as Legal Tender?
Let’s not beat around the bush. Gold coins are cool, but the five-year dollar trend is the real interesting part.
“Last week, Zimbabwe raised its policy rate from 80% to 200% and outlined plans to make the US dollar legal tender for the next five years to boost confidence.”
For those not up to date with Zimbabwe’s economic history, Reuters provides Cliff Notes:
“Zimbabwe abandoned its inflation-ravaged dollar in 2009, opting instead to use foreign currencies, mostly the US dollar. The government reintroduced the local currency in 2019, but it quickly lost value again. Is.”
So, the country is no stranger to the US dollar and it is about to lose its local currency again. A country without a local currency, such as El Salvador and the Central African Republic. This makes Zimbabwe a prime candidate for bitcoin adoption down the road. There is no crowd there. It is unclear if this was in response to the “Mosi-o-Tunya” coin news, but Binance CEO CZ recently tweeted“Africa is ready for cryptocurrency adoption. 10-20% banking. Financial access and inclusion is needed. Blockchain gives it a smart phone.”
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