Like most of the world’s, Zimbabwe ’s economy is in shambles. Is a gold coin the solution, though? It might just be. The country’s central bank announced “the “Mosi-oa-tunya” coin, named after Victoria falls.” It’s Zimbabwe’s response to a dire situation. According to Reuters, “annual inflation, which hit almost 192% in June, cast a shadow over President Emmerson Mnangagwa’s bid to revitalize the economy.”
In a highly unusual move, Zimbabwe ’s government created both a hedge against inflation and a highly-demanded product. A solution to a problem they created, sure, but still. The “Mosi-oa-tunya” coin might just work. “The gold coin will contain one troy ounce of gold and will be sold by Fidelity Gold Refinery, Aurex and local banks,” the article detailed.
A gold coin is no bitcoin, but it certainly provides a solution for analog people. At the present moment, the necessary technology to use bitcoin is not accessible to everyone. Everyone deserves a hedge against inflation, though. And if it’s easy to get to, all the better. Back to Reuters’ Zimbabwe report:
“The central bank governor John Mangudya said in a statement on Monday that the coins will be available for sale from July 25 in local currency, U.S. dollars and other foreign currencies at a price based on the prevailing international price of gold and the cost of production.”
Of course, this leads to a giant unanswered question,
Why Don’t You Use Bitcoin, Zimbabwe?
Almost 8 months ago, rumors that Zimbabwe might be the second nation to adopt bitcoin as legal tender made the rounds. This was a massive step, considering Zimbabwe banned all kinds of cryptocurrencies “to protect the public” just four years ago. However, it more than made sense considering a new Finance Minister formed a governmental cryptocurrency unit to study the subject around the same time.
Africa is primed for crypto adoption. 10-20% banked. Need financial access and inclusion. Blockchain provides that with a smart phone.
— CZ 🔶 Binance (@cz_binance) July 6, 2022
Always ready, NewsBTC reported on the bitcoin as legal tender rumor:
“Now that many citizens are demanding crypto, the government is considering the option seriously. They disclosed this information through one of their local news outlets.
The news also disclosed that the country is already discussing using Bitcoin as a legal tender – the Perm Sec Brig. Colonel Charles Wekwete confirmed this information. He also declared that the blockchain offers both positives and negatives.”
As it turns out, Zimbabwe wasn’t ready for hyperbitcoinization just yet. However, the Reuters story buried the lead. Hidden between the article’s lines was the real story.
BTC price chart for 07/06/2022 on Kraken | Source: BTC/USD on TradingView.com
US Dollar As Legal Tender?
Let’s not beat around the bush. The gold coins are cool, but a five-year dollar run is the real interesting part.
“Last week, Zimbabwe more than doubled its policy rate to 200% from 80% and outlined plans to make the U.S. dollar legal tender for the next five years to boost confidence.”
For those not up to date with Zimbabwe’s economic history, Reuters provides the cliff notes:
“Zimbabwe abandoned its inflation-ravaged dollar in 2009, opting instead to use foreign currencies, mostly the U.S. dollar. The government reintroduced the local currency in 2019, but it has rapidly lost value again.”
So, the country is no stranger to the U.S. dollar and it’s about to lose its local currency again. A country without a local currency, like El Salvador and the Central African Republic. That makes Zimbabwe a prime candidate for bitcoin adoption down the road. There’s no rush. It’s not clear if this was in reaction to the “Mosi-oa-tunya” coin news, but Binance’s CEO CZ recently tweeted, “Africa is primed for crypto adoption. 10-20% banked. Need financial access and inclusion. Blockchain provides that with a smart phone.”
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