Bitcoin demand explodes after country Zimbabwe blocks digital transactions
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The Reserve Bank of Zimbabwe (RBZ), the country's central bank, has suspended all digital payments in the country. The Zimbabwe Stock Exchange also had to stop trading. The measure was announced on the institution's Twitter on March 27.
Impact on digital payments and boost in Bitcoin
The government claims that the measure aims to prevent a conspiracy to sabotage the Zimbabwe dollar. The currency is currently collapsing because of high local inflation. However, it had a major impact on the local population.
This is because millions of citizens depend on digital payment operators, as obtaining physical money is very difficult. One of the impacted companies was Ecocash, commonly used by Zimbabweans to buy Bitcoin.
In response, Ecocash promised to challenge the ban. He claims that only the central bank of Zimbabwe can order him to stop trading. Meanwhile, demand for Bitcoin soared in the country after the suspension. According to the African portal Bitcoinke, the price of the crypto is quoted 18% above the market rate. - https://twitter.com/EcoCashZW/status/1276647067239227392
The news is a setback for the market as a whole. In March, the RBZ was preparing to regulate crypto assets. At the time, the country stated that "crypto-assets are already a reality".
The second-largest hyperinflation in history
The Zimbabwe dollar, or Zimdollar, became known in the past decade for its 100 trillion dollar bill. Between 2007 and 2008, the country experienced the second-worst hyperinflation in history, according to a table prepared by the Cato Institute.
After the collapse, the local dollar was replaced by a basket of national currencies, including the Japanese yen, the US dollar and the pound sterling. However, the government recently banned the domestic use of foreign currencies and reintroduced the old currency. This is the fifth time in Zimbabwe's history that its national currency has collapsed.
Meanwhile, inflation is already above 750%. As a result, citizens rushed to seek refuge, which triggered the local stock market and also the search for Bitcoin.