Cryptocurrency could solve Zimbabwe's cash shortage problem

According to Mthuli Ncube, Zimbabwe's new finance minister, cryptocurrency can help the South African country solve the cash crunch crisis that has been ongoing for the past two years.

On the way to realizing the problem, Ncube plans to convince the Reserve Bank of Zimbabwe (RBZ) to change its attitude towards cryptocurrency and create a unit that will help the Central Bank better understand digital assets, reports IT Web Africa.

Ncube suggested following the example of Switzerland, where the Central Bank has taken a more progressive position regarding Bitcoin and other cryptocurrencies. 

“If other countries see value in this, we should pay attention too. We have progressive young people who can help understand it, we should not ban it, but develop it and look for ways to use it. Without this understanding, it is difficult to design appropriate regulation.”

With banks placing limits on the amounts that depositors can withdraw, more and more people are holding on to their money without trusting financial institutions with it, thereby further exacerbating the cash crunch in the country. And as the economy becomes more dollar-centric, cash shortages are further exacerbated by the fact that foreign exchange reserves are also dwindling.

If Ncube can convince the central bank, it will fundamentally change the regulator's policy towards cryptocurrency. Recall that in May this year, the central bank banned all banks in the country from processing cryptocurrency transactions for both investors and traders in the nascent asset class, citing the risks and dangers associated with it.

And although the High Court later overturned the National Bank of Zimbabwe's ban, regulatory uncertainty has forced some of the cryptocurrency exchanges to move to other markets in Africa.

According to ccn.com