Topic: Zimbabwe government trying to push for new Zimbabwe Dollar - Surprised? - page 2. (Read 629 times)

Corruption and gross mismanagement are the main reasons the nation is where it is today. The current and past state of the economy has discouraged foreign investments and Zimbabwe also frustrates local entrepreneurs who end up taking their businesses and revenue to more friendly countries.
The citizens can make a switch to cryptocurrency, preferably bitcoins and use it for peer to peer transactions.

New economical model doesn't work out if its not sustainable. You can do whatever you want, you can find the greatest solution to inflation ever but as long as its not sustainable it would not make any difference at all. For example, why does their money worth nothing? Its because they have too much debt and they do not have anything to sell outside world so anything they buy from other countries would mean higher debt for them, how do they end up paying that debt?

By printing more money for themselves and exchanging it to dollars as much as they can and pay it. That makes their money worth less and devalue and they keep doing that over and over again. You need to find a solution that would not require you to print money to begin with. If you can't do that than there is no temperament solution, only temporary bandaid.

I am sympathizing with the people of Zimbabwe especially those in the marginalized sectors of the society as they are the ones taking the big hit  when the economy is on chaotic scale. What happened in Zimbabwe can be the result of so many misplaced and misguided decisions of the government in the past and there seems to be the tendency to be repeating the same mistakes over and over again. Right now, the government is burdened in finding adequate measures to control the runaway inflation and to make the economy back to the path of stability and growth. To me, there is no easy fix here. The government must be honest in telling the people of the real score and come up with multi-sectoral approach to the problems so that the challenges are shared by all. I am hoping that soon solutions can be found.

I bet you have no idea what you are talking about, you cannot even compare the current economic situation to Brazil, politics and corruption destroyed them a long time back and they even banned foreign currency thinking that they could regain some control over their own currency.
As long as the corrupt government is gone i do not expect any kind of reform and none can help them regain from their debt from the situation they are in, they just showed the entire world how a government should not perform and destroy the entire country.

in my opinion the condition of Zimbabwe is a terrible economic situation. and no one helped just to seek profit from Zimbabwe's economic difficulties. slowly Zimbabwe will be a sad country. just like Brazil but Brazil can rise by itself. there should be a global organization that can help economic conditions, especially developing countries.

If a country is bound to be doomed, this is how they make mistake in everything that they do , and I wonder who the special adviser to their president is, I guess he is not really doing his work, maybe he is like some of these African countries giving post to people that are not technocrats to man a position just to compensate them for a favor they have done in one way or the other.

If they had technocrats that are handling strategic positions in the country, I believe that by now, they ought to have known and fell that what they are proposing would not work and instead of sorting out the issue, it will end up damaging the economy the more, I guess Zimbabwe just need to reach out for help in other countries that are ahead of them in planning.

The government of Zimbabwe is making the same mistake again, it will be reasonable to assume that after what they did they would have learned their lesson but that is not the case, if anything their economy is bound to suffer even more as they have not recovered from the previous crisis, so the only way to protect yourself completely from this is to leave the country and never comeback but since that is not an option for most then do not use any currency printed by the government and if that is not an option then get rid of it as soon as you can and get something tangible in exchange.

I was aware of delays up to a few days, but delays of more than two weeks is completely and utterly retarded. What are usually the fees that apply to sending money through WU?

How much more quicker and convenient can moving money be than to do it through Lightning? It's not ready for mass use, but at current stage it's usable enough for a fair number of users in need of instant and near free transactions. Another option is that if you don't mind using a custodial Lightning client, you can start receiving Bitcoin through Lightning by just installing an app.

Tether is planning to start issuing USDT on Lightning. This will trigger a wave of innovation and applications built on top of the Lightning layer.

Haven't they learned anything already? Even from looking at other countries you will see that introducing a new kind of currency won't solve inflation in their country. New currency even if its up to the trend cannot be directly translated into demand, and the demand is what they need to solve it not to add in some kind of different supply of money. They need to act on something now and they need to learn from their past mistakes, they even have not recovered with it yet and they are already digging themselves deeper in the ground.   

Countries which import random goods, food, guns, luxury cars (for the government and businessmen) , makeups...without a valuable exportation will suffer.
Without a solid economy, whatever currency they will adopt, it will be useless. The money card will be cheaper than...toilet paper!. I remember seeing a photo in Venezuela where money was lying down in the street and no one collecting it, because simply it is a waste of time and energy to collect i don't know maybe a bag of cards to buy a single bread?

I am a Zimbabwean based in Zimbabwe and I can tell you we have come into a full circle in a space of 10 years, from the massive hyperinflation of 2008 (I have written an article on medium about this here https://urlzs.com/zzQvY).

 We then had an inclusive government in 2009 -2013 and we adopted the USD after the local Zimdollar crushed and the economy grew during this period. Then Zanu pf(the ruling political party) came back into power and things went haywire, the economy went into a downward spiral and USD notes vanished from the banks and people were left with electronic balances in their accounts.
The government thought it could solve this situation by printing what they termed ''Bond notes'' a local currency, not internationally recognised but which was pegged at par with the USD. But as you know according to Gresham's Law, ''Bad money drives out good money'' so this worsened the situation and the parallel market for money emerged. As I write to this post the Bond note is trading at 10:1 to the dollar. The government also thought it wise to ban the usage of the USD for transactions but as you know that won't work in a country that imports everything including toothpicks!.

And to answer your questions

Where is the Zimbabwean Economy going?
With the current Zanu pf government in power, there is no hope for improvement. To make matters worse they are backed by the military which even carried out a coup on the previous Zanu leader and replaced him with another Zanu leader in 2017! No one has confidence in the government and the recently introduced RTGS dollar. Memories of lost investments and pensions of 2008 are still fresh on people's minds and it will take a lot for the government to regain that confidence. The biggest elephant in the room is CORRUPTION and lack of rule of law. The country is a bad debtor internationally and because of past and present human rights violations perpetrated by the ruling party, we are under sanctions. Given the above, you can easily tell that the RTGS dollars is poised to go in one direction, down.


How we are protecting ourselves in these times.
1. People are buying foreign currency and keeping it in homes as it is more stable
2. Trade in cryptocurrencies was banned by the Reserve Bank of Zimbabwe but people are relying on bitcoin to make foreign payments and to receive remittances easily as services like Western Union are usually overwhelmed and it can take more than 2 weeks for one to get their money. Since crypto exchanges like Golix were banned we now rely on Telegram and Whatsapp groups were massive peer to peer trades take place.

There is the need for Zimbabwean entrepreneurs to come up with more innovative ideas to move money quickly and easily using the blockchain like in the case of SPENN in Rwanda as well as ways by which people can make real and secure investments in Bitcoin and crypto.

Mpesa is in Kenya, Zimbabwe uses Ecocash which is a USSD code-based mobile money system.

As an African I sympathize with all Zimbabweans, what they're suffering isn't in any way different from what most other nations in Africa are battling with in regards to the inflation of our local currency. Many commenting here won't understand but I have had similar experience in regards to the value of your local currency suffering a high rate of inflation due to bad economy mostly caused by bad/corrupt governance. The government of the day have refused to tackle the problem from it roots which is the high rate of corruption in the country so until that is been done we shouldn't expect any difference anything soon.

My opinion on what Zimbabweans can do, involves them engaging in cryptocurrency related business which I guess many of them are already aware of. Holding their local currency only make them poorer but if they were to invest in bitcoin and take advantage of the price volatility the story would be different. Note the government has banned forex but cryptocurrency trading aren't easily tradable therefore, they can find redemption in bitcoin.


The government can't be doing the exact same thing but expecting a different result. Before we talk about the future of their economy they first have to fight to reduce or totally eradicate the corrupt practices in the country. Which involves having a free and fair election to elect in a president with a version for the country then we can't start debating on the future of the economy. Using the current factor, just like most other nations in Africa their economy won't improve anything soon.

I do believe their plan will failed miserably, as essentially they use 'money' which can be printed as long as it's needed by a centralized parties.

If Zimbabwe government want to avoid the hyperinflation crisis, I do think they have several options to do:
- Readjust their printing, make it manageable so that the circulating supply is not that much.
- Increase interest on bank, push people to save their money while working on international deals/making policies to attract interest from international investors/government to push the price and stabilize their fiat value.
- Open up forex market, don't limit people to trade foreign currency  to avoid people paying $200 for $1.
- If all of that fails, then stop using fiat and switch to sound money or asset-backed money. Their option is BTC or gold-backed currency. This should attract interest from the market as the government won't be able to control the supply (as long as the gold-backed money has enough transparency), but they need to make sure to get their policies right as it could back-fire later on.

We all know that there is a big problem within the economy of Zimbabwe, ever since one of the root causes of it's hyperinflation is the Corruption in their Government. The Politics and Society within them need to change, and I think that's the best way to first tackling the problem. I saw that ever since the hyperinflation, they have been using USD for transactions now, so I think they are okay with that currently. Now we see that new Zimbabwe Dollar. It's one way to alleviate the current happenings, but now, the government can repeat what happened during 2007.

I think what's going to happen when they establish that makes USD stronger, so it's just another cycle. I can't say for sure the direction of them, but hopefully, they could integrate the blockchain to help the people there be more transparent with transactions, etc.

I think the only issue here is removing the 1to1 ratio which is basically what USDT did as well, I mean if you have a bond that is basically 1to1 usd and then peg your national currency to it then that's fine, it is actually a good logic so that your money doesn't get too my inflated in the future, anytime it goes up you can just sell it for dollar and make a profit so nobody would allow it to go too high.

However, if you remove that then people would see it as a bad sign and sell it, when they sell it what happens? High inflation happens. Money starts to worth nothing at all. That is why the idea was good actually but the execution was poor, that is why bitcoin doesn't have any controller, if we allowed people to have power over bitcoin they would screw up like this all the time.

Looks like it's going to fail again. I'm not much knowledgeable when it comes to economics but maybe they can try what Brazil did? I remember they also had high inflation for a time and they switched currency slowly.

I don't know if it's going to work with Zimbabwe though. It seems their problem is way down to the bottom of the chain. They've practically destroyed their agricultural sector.

It seems that they're back at it again, and the only way the people of Zimbabwe needs to do to avoid such rapid inflation is to use other currencies which are banned from being used in the country by the government. The events in Zimbabwe currently is a prime example that not every revamp is successful if the same steps that led to the previous failed attempts are being done again. It seems as if the government themselves are hindering any progress on their country as evidenced by their lack of control on cash flows resulting into tremendous inflation. If the same heads rule the land with the same way of thinking, then idk, the citizens are probably doomed.

Zimbabwe can progress on a steady scale, the main problem is the government is not working on a Grass root level. First, they have to control how much their country is spending and did not mean only to Government employees but to the local market. And that you cannot do you by sitting on a chair you have to go on grass root level and do it yourself you can not just give orders. I know that a government is much more complex about all these things but they are simply losing the smaller and important steps they are not teaching people how to make stuff that you can trade all across the world. May be their own locality do not have much of the money or good education but they have to acquire it from outside their country.

I'm not 100% sure - although I've seen various reports that say that foreign currencies are banned within Zimbabwe, including this one.

You're right in terms of the lack of enforceability that the government has when it comes to both the forex market, as well as the cryptocurrency market. As far as I know though, there is no explicit saying that you cannot hold a digital asset like BTC still within Zimbabwe (maybe it'll change in the future, who knows). AFAIK, there are still tons of forex dealers on the streets/black markets.

What I'm concerned about is that

1. There will be significantly higher premiums paid by these people, since they exist essentially within a closed off system that has tight capital restrictions.
2. The lack of awareness about cryptocurrencies, leading to people thinking that they have to hold onto their Zimbabwean dollars - and ending up disastruously like the 2007 crisis.