[2019-07-12] Peer-to-Peer Transactions Spike in Zimbabwe

o_e_l_e_o

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Quote from: timerland on July 16, 2019, 07:46:24 PM

Do the Zim government really expect their population to believe in the stability of their currency, after the 3 currency reforms that they tried to do to save the Zim dollar all went to crap?

I don't think they do, which is why they banned foreign currencies. If they were confident that people would use their new currency, then launching it and paying people in it should have been enough. Why would you go through the effort and take the hit of exchange fees for changing from Zimbabwe dollars to US dollars if Zimbabwe dollars were a good currency? The government knew full well their citizens wouldn't want to use their new currency, so they made it illegal to use any other currency.

I read a great quote in an article about this last week:

Quote from: https://www.fin24.com/Economy/Africa/zims-dollar-returns-a-decade-after-it-became-worthless-20190624

People aren’t sure that there’s something backing the currency. There’s no way that something like this will be maintained.

Even being the only legal tender in the country, if the populace at large don't believe it is worth anything, then it isn't. Fiat is based on a collective acceptance that it has value. If no one believes in that value, then the currency collapses.

timerland

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Quote from: joelsamuya on July 12, 2019, 10:14:47 PM

Quote

In late June, Zimbabwe re-introduced the Zimbabwe dollar, nearly a decade after abandoning it. The newly minted currency brought with it a ban on the US dollar, British pound, South African Rand, Botswana Pula, and a host of other foreign currencies.

The struggling economy's only legal tender is now the Zimbabwe Dollar, but that hasn't stopped Zimbabwean's from transacting Bitcoin. Nor has the country's ban on cryptocurrency exchanges.

Peer-to-peer transactions of Bitcoin are surging in Zimbabwe as the country's economy faces an uncertain future. Mobile money platform, EcoCash, which handles 99% of cash-in transactions in Zimbabwe, is the gateway of choice for most looking to move their USD to Bitcoin and other cryptocurrencies. Amid Zimbabwe's policy reform, EcoCash saw 11.5% growth in the first quarter of 2019.

Source: https://www.investvoyager.com/blog/peer-to-peer-transactions-spike-in-zimbabwe-following-foreign-currency-ban/

It is nice to see the big growth of Bitcoin happening right now in Zimbabwe which is showing us that indeed even if the government banned the cryptocurrency there are ways to get into it as long as there is that demand (or should I say strong) from the people. In a struggling and very problematic economy like this country has, Bitcoin can be playing a big role in storing value and providing more stability for the people.

Jesus christ. I've always been interested in the Zimbabwe situation from an economic standpoint, and this is just awful to hear.

Do the Zim government really expect their population to believe in the stability of their currency, after the 3 currency reforms that they tried to do to save the Zim dollar all went to crap? They just recently introduced the so called "bond notes" which was a sign that they weren't going to dabble with creating their own currency anymore, and confidence was just building up. And now, this is just a big hit to it once again. Banning foreign currencies doesn't help at all.

It's no surprise that the Zimbabwean population are trying to diversify their assets into something accessible, yet a long term store of value, like BTC; especially when other forex is banned from being directly traded.

After all, the tales of hyperinflation isn't as distance to them as it is to the majority of the western nations. They are very well aware of the economic consequences of holding a depreciating Zimbabwean dollar for the long run.

BitHodler

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Quote from: harvestt on July 15, 2019, 08:45:39 AM

Countries like Zimbabwe do not have "good" laws, the next such law could lead to serious punishment for such transactions

That's why people transact in a peer to peer manner. I'm not aware of the laws in Zimbabwe, but people shouldn't be too bothered as long as they skip centralized services that do report to governmental agencies.

The main thing with articles highlighting the popularity of Bitcoin in a certain country is that they always exaggerate to make it look like country x or y is a crypto hub, while in reality it isn't that at all.

I have yet to see an unbiased report about adoption of Bitcoin in shaky countries such as Zimbabwe. News outlets are too lazy and not interested in conducting research, so we should always take these reports with a grain of salt.

harvestt

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In fact, this can end badly for those people who make transactions using btc. Countries like Zimbabwe do not have "good" laws, the next such law could lead to serious punishment for such transactions

davis196

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The fact the there's a bitcoin transactions spike in Zimbabwe doesn't prove that the majority of the people in that country use bitcoin everyday.It's just a small group of rich people and business owners,who are trying to protect their savings from the inflation and the corrupted government.

stompix

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Quote from: o_e_l_e_o on July 14, 2019, 06:37:32 PM

Quote from: stompix on July 14, 2019, 09:18:05 AM

Anyhow, what is peer to peer here when they use a centralized platform?

EcoCash is a centralized platform for holding, spending, and transferring fiat, not bitcoin. Think of it kind of like Paypal, except only on mobile phones and only in Zimbabwe.

The 11.5% increase in EcoCash use was likely due to Zimbabwe banning the use of foreign currencies such as USD, and thereby leaving people with no other options but to use it. Only a tiny fraction of that increase is likely to be due to increased bitcoin activity.

So, the article mentioned an 11.5% increase in Eco Cash, which can be trusted to some point as it is a company statement but it also claims right in the title that p2p transactions are spiking.
And the proof for that is.....I can't see any.

Also, don't forget that while saying that Zimbabwe banned foreign currency it is claiming:

Quote

EcoCash, <>, is the gateway of choice for most looking to move their USD to Bitcoin and other cryptocurrencies.

Sorry, this article is simply crap.

If there was a surge we would see it here but I guess the spike is from 10 to 20 tx a day.

o_e_l_e_o

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Quote from: stompix on July 14, 2019, 09:18:05 AM

Anyhow, what is peer to peer here when they use a centralized platform?

EcoCash is a centralized platform for holding, spending, and transferring fiat, not bitcoin. Think of it kind of like Paypal, except only on mobile phones and only in Zimbabwe.

Since bitcoin was made illegal in Zimbabwe, exchanges no longer operate there so all bitcoin trading has to be peer-to-peer. Citizens use EcoCash to transfer fiat directly to each in exchange for bitcoin.

The 11.5% increase in EcoCash use was likely due to Zimbabwe banning the use of foreign currencies such as USD, and thereby leaving people with no other options but to use it. Only a tiny fraction of that increase is likely to be due to increased bitcoin activity.

stompix

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Quote from: Kakmakr on July 14, 2019, 07:03:11 AM

When you force your citizens to use a weak local currency that destroys their wealth,
<>
People are then forced to use illegal means to protect their own wealth

What wealth?

buwaytress

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Quote from: hugeblack on July 13, 2019, 01:57:33 PM

Excessive exhaustion is one of the main reasons for choosing to deal with cryptocurrencies but this feature has dark aspects as many uses these currencies as a safe haven.
Using it as assets that can increase their value will be counterproductive when their price collapses and it is against the use in the day-to-day handling of needs.

It is better to exchange BTC to any stable coin to avoid hyperinflation.

How did this piece of news slip by me, hmm. Zimdollar back in use for weeks now, I see they've also abolished the multi-currency system -- which isn't actually a ban on foreign currency like the article seems to suggest. Basically, it's the only legal tender in the country, like most countries make their own currency the only legal tender... shops etc can only accept it. But your USD and Bitcoin will just be as accepted as before at money exchangers.

I suppose it was only a matter of time but you'd have thought they'd have waited a little longer before reinstalling it. Hasn't been a kind decade at all for any currency in that region.

Bitcoin's always had a premium in Zimbabwe too, and I suppose otc and p2p trading is just one more utility for it. ZWL. Going to take getting used to!

o_e_l_e_o

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Quote from: hugeblack on July 13, 2019, 01:57:33 PM

It is better to exchange BTC to any stable coin to avoid hyperinflation.

The new Zimbabwean RTGS dollar was initially pegged 1-to-1 with USD. The official rate is currently in the region of 3:1 or 4:1, but on the streets it actually exchanges for over 10:1. Inflation of the RTGS dollar is already at 100% and rising rapidly. Bear in mind it only took around 6 years last time for inflation in Zimbabwe to go from 100% to an incredible 79.6 billion percent.

Provided BTC doesn't massively crash in the space of a few weeks, holding BTC will still hugely outperform their native currency.

Kakmakr

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I think a lot of people thought the replacement of President Robert Mugabe would trigger new economic growth for Zimbabwe, but the one evil was replaced by a new evil with the same agenda. When you force your citizens to use a weak local currency that destroys their wealth, it does not make you a better leader.

People are then forced to use illegal means to protect their own wealth from a corrupt government and the only way for them to do that is to use a decentralized technology like Bitcoin that cannot be stopped by corrupt governments. < It might be banned and made illegal, but the people will still use it.> Tongue

veleten

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there is nothing unusual , Zimbabwe's economy struggles - inflation and low wages
make people look towards something that could save their money from further devaluation
bitcoin there , despite its volatile nature and being banned , serves as a vehicle to escape hyperinflation
I wonder how do they exchange it in their day-to-day routine since its illegal , guess it doesn't stop Zimbabweans at all

hugeblack

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Excessive exhaustion is one of the main reasons for choosing to deal with cryptocurrencies but this feature has dark aspects as many uses these currencies as a safe haven.
Using it as assets that can increase their value will be counterproductive when their price collapses and it is against the use in the day-to-day handling of needs.

It is better to exchange BTC to any stable coin to avoid hyperinflation.

joelsamuya

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Quote

In late June, Zimbabwe re-introduced the Zimbabwe dollar, nearly a decade after abandoning it. The newly minted currency brought with it a ban on the US dollar, British pound, South African Rand, Botswana Pula, and a host of other foreign currencies.

The struggling economy's only legal tender is now the Zimbabwe Dollar, but that hasn't stopped Zimbabwean's from transacting Bitcoin. Nor has the country's ban on cryptocurrency exchanges.

Peer-to-peer transactions of Bitcoin are surging in Zimbabwe as the country's economy faces an uncertain future. Mobile money platform, EcoCash, which handles 99% of cash-in transactions in Zimbabwe, is the gateway of choice for most looking to move their USD to Bitcoin and other cryptocurrencies. Amid Zimbabwe's policy reform, EcoCash saw 11.5% growth in the first quarter of 2019.

Source: https://www.investvoyager.com/blog/peer-to-peer-transactions-spike-in-zimbabwe-following-foreign-currency-ban/

It is nice to see the big growth of Bitcoin happening right now in Zimbabwe which is showing us that indeed even if the government banned the cryptocurrency there are ways to get into it as long as there is that demand (or should I say strong) from the people. In a struggling and very problematic economy like this country has, Bitcoin can be playing a big role in storing value and providing more stability for the people.

Topic: [2019-07-12] Peer-to-Peer Transactions Spike in Zimbabwe (Read 200 times)