Zimbabwe Will Issue Gold Coins To Control Inflation. Why Don’t They Use BTC?

Like most countries in the world, Zimbabwe’s economy is in shambles. Is the gold coin the solution? It may be so. The country’s central bank has announced the ‘Mosi-oa-tunya’ coin, named after Victoria Falls.” It is Zimbabwe’s response to the dire situation. ReutersAnnual inflation, which reached around 192% in June, cast a shadow over President Emmerson Mnangagwa’s attempt to revive the economy.

In a highly unusual move, the Zimbabwean government has created an inflation hedge and a much-needed product. A solution to a problem they created, sure, but still. The “Mosi-oa-tunya” coin may work. “The gold coin will contain one troy ounce of gold and will be sold by Fidelity Gold Refinery, Oryx and local banks,” the article says.

The gold coin is not bitcoin, but it certainly provides a solution for analog people. At the moment, the technology needed to use bitcoin is not available to everyone. However, everyone deserves an inflation hedge. And if it’s easy to access, that’s even better. Back to the Reuters report on Zimbabwe:

Central Bank Governor John Mangodia said in a statement on Monday that the coins will be available for sale from July 25 in local currency, US dollars and other foreign currencies at a rate dependent on the prevailing global price of gold and the cost of production. . “

Of course this leads us to a giant unanswered question,

Why not use Bitcoin, Zimbabwe?

Almost 8 months ago, rumors surfaced that Zimbabwe might be the second country to adopt bitcoin as a legal currency. This was a huge step, considering Zimbabwe has banned all types of cryptocurrency To “protect the public” just four years ago. However, it makes sense to consider the formation of a new Finance Minister Government Cryptocurrency Unit To study the topic at about the same time.

always ready, NewsBTC reported On Bitcoin as a legal rumor:

“Now that cryptocurrency is being demanded by many citizens, the government is seriously considering the option. They disclosed this information through one of their local news outlets.

The news also revealed that the country is already discussing the use of Bitcoin as a legal currency – Perm Sec Brig. Colonel Charles Wiquette confirmed this information. He also declared that blockchain offers both pros and cons.”

As it turned out, Zimbabwe was not yet ready for the overexertion. However, the Reuters story buried the lead. The real story was hidden between the lines of the article.

BTCUSD Price Chart 07/06/2022 - TradingView

BTC price chart for 07/06/2022 on Kraken | Source: BTC/USD on TradingView.com

The US dollar as legal tender?

Let’s not beat the bush. Gold coins are great, but the five-year dollar run is the really interesting part.

“Last week, Zimbabwe more than doubled its policy rate to 200% from 80% and outlined plans to make the US dollar legal tender for the next five years to boost confidence.”

For those who haven’t kept up with Zimbabwe’s economic history, Reuters offers rocky notes:

Zimbabwe abandoned the inflationary 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.”

So, the country is no stranger to the US dollar and 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 in the future. There is no rush. It is not clear if this is a reaction to the “Mosi-oa-tunya” coin news, but the CEO of Binance CZ Tweet recently“Africa ready for crypto adoption. 10-20% bank. Needs financial access and inclusion. Blockchain provides that with a smartphone.”

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