Topic: Why is BTC at $10,000 in the USA and also at $76,000 in Zimbabwe? (Read 566 times)

Is BTC in  Zimbabwe still $76,000   ?
I didn't know that...

To hold any Dollars, Gold or Diamonds in some african countries is danger. You can't easy hiding them. And if you try to run away in another country, you can't take anything like this with you.

Bitcoins don't have any problems like this. If you remember the seed and have it in your mind, you are safe and probably rich.

That's make the price up.

Near impossible, unless you live in the region. Zimbabwe has banned bitcoin exchanges, and so the main African exchanges such as Golix do not trade there. Even for citizens with full Zimbabwe IDs, bank accounts, etc., it is still very difficult to get USD in or out of the country electronically. For foreign nationals, it is near impossible. I'm sure there will be some people buying bitcoin in South Africa (for example) and then traveling across the border and selling at a premium in USD, ZAR, or another foreign currency, but such practice is illegal and so very risky.

Zimbabwe isn't exactly renowned for being a bastion of free speech. Government sponsored violence is commonplace. Political opponents, activists, and protestors are subjected to intimidation, attacks, beatings, being made homeless, or murder. There are even reports of government run torture facilities.

This explains things a lot better. I was thinking arbitrage would be easy but I think you're right that they are converting the local currency to USD at that point. Have any insight on why a country's people would allow this to even happen though? Looking above, this doesn't seem to be the first time it has happened (devaluation to extremes) and you would think people there would take a stand after losing so much time after time. If what I'm reading is right, living in Zimbabwe right now or anytime in recent history is pretty much a situation where you want to convert earnings ASAP before you lose it all. We are kind of in the same situation with first-world currencies and inflation but not nearly to the same degree, and it's ludicrous to force people into that type of lifestyle they are facing.

Probably because all currencies that are being used down there in Zimbabwe are volatile and the only option to them now is to use cryptocurrencies which seem to be at least are the stable and less volatile as compared to what they have.

The situation in Greece was never as bad as it is in Zimbabwe, and, probably, countries like USA, UK, Switzerland and Germany will never be in the place of Greece even, regarding the economic situation, and yet I agree with you that most countries are not immune to hyperinflation, and Bitcoin can be a good solution for them in case of economic crisis. It's good that there have been less and less governments like that in Zimbabwe, who are not only drag their country into crisis, but, on top of that, obstruct their citizens to get out of a difficult situation on their own.

This is why Bitcoin is a much better option than local reserve currencies. You do not have a government forcing you to use their reserve currency and you are also not told how much you can take out of that country. Bitcoin gives people true financial freedom, but most people do not appreciate this, because that privilege has not been taken away from them...yet.

People in 1st world countries have strong currencies and they do not need protection from their own government, so they simply ignore this threat, but when this happens to them, then they suddenly look for other alternative currencies.

This is the root of the problem. As I mentioned earlier in this topic, the government have done little, if anything, to address many of the factors which resulted in Zimbabwe's weak economy and hyperinflation. They blame outside causes, even blaming the foreign currency which kept their country afloat over the last 10 years, whilst ignoring the fact that their decision are what resulted in Zimbabwe's farming and manufacturing sectors all but disappearing, the state sponsored violence and suppression means no citizen trusts them, etc. Banning their citizens from using a currency they are all dependent on, and has formed the basis of their economy for the last 10 years, is unlikely to do very much to improve the whole "we don't trust the government" thing.

They've launched a new currency in the same (or maybe even a worse) economical climate which caused hyperinflation of the last one. The results will be the same.

The problem started with this --> http://www.702.co.za/articles/353581/zimbabwe-bans-foreign-currency-reigniting-fears-of-hyperinflation and I quote, " Kasumba discussed the banning of foreign currency in Zimbabwe to stop the illegal money trade the government blames for rising inflation. Until it introduces a new, permanent currency, the RTGS dollar remains the only legal tender."

So you have a government that wants to shift the blame for their weak economy and bad political decisions onto something that would clearly not help to solve their problems.

Zimbabwe alienated the world, when Mugabe was still in power and after he was replaced, things just went on as normal. The problem is much deeper than foreign currency use and people are using these alternative currencies to protect their wealth from hyper inflation that are out of control with their own reserve currency. 

Zim $$$ drop faster then turbocharged shitcoins. xP


They can get bitcoin from a regular exchange I don't know why anyone would exchange for zim $$$ when they can use USD or even bitcoin. I wonder what that amount of money looks like in zim $$$, do you need wheelbarrow full to buy just bread, like during the great depression in Germany. That was hectic...

This talk of making crypto illegal is getting old and people are ridiculous. The government can't just do what it wants. You don't know what people are doing online. You can't tell if someone owns crypto. Besides making crypto illegal is against your human rights. If the government can't handle crime how on earth will they handle crypto transactions? The very idea is Ludacris. The government has better things to do I promise you that.

That's what I'd been thinking too while reading the posts above. In reality you can't buy US$76k worth of goods or services with a load of Zimbabwean Dollars that, according to the official exchange rate, "worth" 76k USD even in Zimbabwe, let alone in other countries. Nor you can exchange a trunk of that worthless paper for anything even close to 76k USD anywhere in the world. Same goes for Venezuelan Bolivar and for other currencies in countries with hyperinflation.

Is this $76.000 paid in US dollars, or is it the converted amount paid in Zimbabwean dollars? My guess would be it's the latter, meaning the real exchange rate is much lower than the official exchange rate.
And that makes sense: a US dollar is still worth (more or less) the same a week later, while a Zimbabwean dollar is instantly worth much less. That makes the Zimbabwean dollar something you quickly need to get rid off, so exchanging it to Bitcoin is much better than keeping, even if you have to pay a much higher rate.

I think the underlined part is the problem
A much more conventional way would be to officially switch to using US dollars.

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According to Mycelium on my phone, BitcoinVenezuela.com has an exchange rate of 32374460.75 EUR per BTC. I don't think I'll get a truckload of euro bills if I would go there with 1 Bitcoin.

This is due to capitalism. It is the main reason. Capitalism, corruption and greed. Healthy crypto-anarchism with a share of socialism will save this world. I hope so =)

What was fake news?  The entire 76K fiasco was fake??

It was proven that this was fake news.

Don't believe discrepancies that are this high, at most it is a 10-20 % premium that is paid in certain countries.  I've seen this happen in Korea, Iran, and a few other countries.  A lot of money can be made through arbitrage if you have the right connections set up and act quickly.

Bitcoin is not a global currency. At All.

Thanks, that makes a bit of sense. If I understand correctly then they are selling (trying to) bitcoin at huge prices but they are accepting payment in Zimbabwe currency, not dollars, we are just reading about what the value would be converted to dollars. So the sellers are hedging against the expected massive and rapid inflation of the local currency, in that case the price doesn't seem out of whack. I wonder how the regular folks there cope.

Which in a result have same impact as before. Bitcoin is REAL international value and local currency is garbage. So less and less people want to exchange their Bitcoin for this local currency which is no suprise at all. So someone willing to do it, wanting premium price.
Explained

I am curious and click on link to read, but it seems that the link to given article is dead, or you mislinked it. Not sure. If you mislinked it, please fix. Thank you so much.
In another article, with this hyperinflation rate, I wonder that Zimbabwe will become a second Venezuela or not.
https://mg.co.za/article/2019-06-24-why-no-ones-buying-the-new-zimbabwean-dollar

That's exactly what the government did. There is a large African exchange called Golix which used to trade pretty large volumes in Zimbabwe, which has had to shutdown their operations in the country. They have had their fiat accounts frozen, and have even stopped operating their bitcoin ATM in the capital, Harare. The vast majority of international exchanges like Coinbase, Bitstamp or Kraken, don't accept accounts from Africa. From what I've read, it seems some are travelling over the border to South Africa and buying there - these may well be the same people who are offering to sell on localbitcoins for $76,000.

The real irony is the government made bitcoin illegal because of its potentially "destabilizing effects" on their financial system.

What's stopping them from just getting bitcoin on a regular exchange? Is the access to non-governmental internet prohibited? Is the access to a computer at all kind of rare? Many have cell phones these days, even people in 3rd world countries. Seems like bitcoin would be hard to stop there without just outright making it illegal. With the worldwide interconnectedness I don't understand why the large price differential, seems like (assuming access to electronic accounts) they could just buy at the regular world market rate for bitcoin.

After reading @o_e_l_e_o replies I must say if Zimbabwe government were wise, accepting bitcoin as their country's Currency could be a starting ground for solving the country's problem as bitcoin can't be affected by inflation. Country's like these are perfect example of why bitcoin is the solution to the worlds currency inflation problem. After doing so, then the government can shift thier focus to developing the countries economy and fighting corruption to better the country. The US Dollars is been given too much power and as far smaller country still look up to the USD to determine the value of their currency the rate of inflation of those currency will continue increasing.

Our local Naira is been affected yearly by inflation too currently it's been exchanged around $1 = N350 +/- that's why most genuine Nigerians are getting attracted to bitcoin as for every $1 gained we get around 350 +/- naira.  Which means we get twice profit, one for holding bitcoin (Price increase) and second for exchanging USD to Naira

In summary:

The Zimbabwean dollar goes through massive hyperinflation and is re-denominated 3 times. First in 2006 at 1000:1, then again in 2008 at 10,000,000,000:1 (ten billion to one), then again in 2009 at 1,000,000,000,000:1 (a trillion to one), meaning 1 dollar of the final re-denomination is worth 10²⁵ dollars (10 septillion dollars) of the initial currency.
In January 2009, Zimbabwe officially legalizes the use of foreign currencies, and the Zimbabwean dollar is pretty much abandoned by everyone.
In 2014, the Zimbabwean government releases bond coins, which are pegged to the USD, which is now the de-facto currency of the country.
In June 2015, the Zimbabwean dollar is de-monetized (removed from circulation and no longer deemed legal tender), and is exchanged for USD at an exchange rate of 35 quadrillion to 1.
In 2018, the government follows up their bond coins with bond notes. Despite the supposed pegging of these, they trade for around 3:1 or 4:1 against actual USD.
In February 2019, the government launches a new currency called the RTGS dollar, made up of account balances, and the previously issued bond coins and notes.
Last week, they officially declare the RTGS dollar the only legal tender in the country, and outlaw all foreign currencies, including the US dollar, which is what almost every shop and service is currently using.
RTGS is already seeing high inflation rates, and is currently trading at around 11:1 against USD.

Here's another very good article about the situation: https://mg.co.za/article/2019-06-24-why-no-ones-buying-the-new-zimbabwean-dollar

Wait for real? I had no clue about this currency change of Zimbabwe up until now, and seems like Zimbabwe are only fucking up their economy more by the day.

I read this article by bloomberg, and the country is soo fucked, they are lacking passports, and almost everything else a country could possibly need to survive. Then I stumbled upon another article where they plan on initially printing 400 million$, but that's not gonna help them if their policies and everything else that destroyed their economy still remain the same. That's only putting more fuel to fire, aka more inflation, more people getting involved in black market trades, and for what we could tell, a massive economic downfall that could impact more than what we will ever foresee.

While some smart people would be wise to get into the Zimbabwean bitcoin market by buying it from the cheaper markets from the ROW and sell at a premium in their local country if its any at all possible, the most of them won't, mainly because there isn't enough money whatsoever in the hands of the citizens.

Fair point. It's like trying to grow the same tree on the same soil in which other similar trees died. It simply wouldn't work out.


Which puts trust as a huge factor in making things work for the government. That's why most systems that require trust will always have a weakness. If one party does not trust the other enforcing the rules, resistance would be met and failure is always looming, just like RTGS currently.


Thanks for the read.

The currency per se is not the issue, and creating a new one doesn't solve any of the problems Zimbabwe is facing. The reasons behind the hyperinflation a decade ago are complex and multifactorial, but include a variety of issues which have not been addressed in any meaningful way since then - corruption, lack of confidence in the government, government sponsored violence, widespread unemployment and poverty, declining farming and manufacturing, etc. Simply launching a new currency in the same economic environment that destroyed the old one will obviously be met with the same results.

This article makes some interesting points: https://www.fin24.com/Economy/Africa/zims-dollar-returns-a-decade-after-it-became-worthless-20190624
If the people don't believe the currency is worth anything, then it will become worthless. Inflation is already at 100% for this newly launched currency. I don't think it will survive very long.

So in this case, we can somehow see that a complete revamp of a nation's currency does not save itself from yet another instance of massive devaluation and hyperinflation. It really needs to overhaul the government and its officials because they can't apparently control the situation, even with a new currency. I can see why the citizens can't trust the new currency, as it was met with legal issues and uncertainties even from the lawmen in the said country, and that's why bitcoin, together with USD is the most prized currency currently, even if it was banned by the government.

Partly, but that's not the full story.

Last week the Zimbabwean government banned all foreign currency, including the US dollar, and stated that the government's RTGS dollar is the only acceptable currency. This new currency, which was launched in February after the old Zimbabwe dollar was demonetized back in 2009, is already starting to see the same rampant inflation which crashed the old currency. People don't like being paid in it because it rapidly devalues, and the price of goods and services in RTGS dollars is rapidly increasing. Because of all this, US dollars are now both illegal, but also much more stable and more in demand than their own currency, and so attract a premium price on black markets.

The hard inflation of the local currency which isn't valued anymore seems to cause a drastic increase in the demand for the usage of bitcoin within the country for various needs. This looks to be the prime reason for such a drastic growth in price on localbitcoins trading platform.

Over the year such a scenario took place with India, and the difference wasn't this high. By that time the difference between India and rest of the world was around $2500. The reason behind such a difference was termed to be the demonetization of the Indian currencies.

What are the reasons for this price difference?