Tuesday, September 26, 2017

Sadly even Bitcoin is subject to hyperinflation when it comes to Zimbabwe

In recent times the nation of Zimbabwe is the poster child of what happens when confidence in one's currency becomes completely eroded.  And even today there are people who hold the now infamous 100 Trillion Zimbabwe Dollar as a momento to that period of extreme hyperinflation.

But sadly Zimbabwe even today has not completely come out from beneath that Damocles Sword of currency devaluation, and astonishingly we are even seeing its tendrils touch cryptocurrencies as the price of a Bitcoin in the African nation is nearly double its current market value elsewhere.

Stories of hyperinflation in various countries have been mounting in recent days. As citizens face the reality that their country has devalued its currency, they are forced to take backpacks of cash to buy a loaf of bread. 
Within these devalued currency environments, other forms of money--stable ones--are welcomed. Zimbabwe is one such nation. There, hyperinflation reached a critical point in 2008, and is threatening again. The country appears to be headed toward another bout of hyperinflation and citizens are turning to dollars and Bitcoin. 
The use of Bitcoin in Zimbabwe has grown exponentially as the government has begun to stop all credit card payments and has restricted the flow of cash into and out of the country. People wishing to make payments for vehicles have been forced to use Bitcoin and car lenders are happy to accept. 
In all the chaos, the price of Bitcoin on the local exchange, BitcoinFundi, has soared to $7,200. This premium reflects a frantic desire to find ways to transact within an economy where government controls have made traditional means impossible. – Coin Telegraph

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