Tag: Zimbabwe

What Factors Are Driving The Bitcoin Remittance Revolution In Africa? These Ones

by NEWSBTC

The Bitcoin remittance business is blowing up all over the world. South African financial website moneyweb brings us the report directly from the oldest continent. The conditions that led to El Salvador making Bitcoin legal tender are present all over Africa. The people are unbanked but everybody has mobile phones. Plus, the diaspora is huge and sends money home constantly while big companies rob them blind with high fees. 

Related Reading | Is Largely Unbanked Africa Primed for Bitcoin Adoption?

“The African continent has many opportunities for widespread Bitcoin adoption. One of those opportunities is remittance fueled by Africa’s growing ~mobile~ population. There are over 30 million Africans living outside their countries of origin. Since 2012, the African Union considers the African diaspora the sixth Africa’s region.”

On one hand, “countries such as South Africa, Nigeria, and Kenya” want to regulate bitcoin and other cryptocurrencies. On the other, “According to the World Bank Global Findex, 60% of the population” in the continent are unbanked. The recipe is there. And Bitcoin remittances might be the use case to bring mass adoption to Africa.

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Remittance Revolution, Factor 1. Mobile Wallets

Not only is the mobile population growing, but the whole continent also has ample experience with other forms of “mobile money.” It’s a concept already entrenched in the culture:

“Africa is the global leader in mobile money usage. Sub-Saharan Africa has the fastest growing mobile money industry in the world. The region will continue to see substantial growth in the number of people owning mobile phones. Mobile subscribers in Sub-Saharan Africa are projected to reach 623 million by 2025, half of the continent’s population. The figure will be even higher because of mobile phone sharing culture.”

From there to using Bitcoin, the most efficient money network in the world, it’s just a step. The road is clear.

Factor 2. Government Policies

Inadvertently, governments all over the African continent are pushing Bitcoin adoption with their restrictive policies. For example

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“In 2020, the Central Bank of Nigeria suspended international mobile money transfers to Nigeria. The suspension came after the banking regulator allowed US dollar payouts for international remittances in the country.” And that “means that only Nigerians with a bank account will be able to receive money from abroad. Not all international money transfer services to Nigeria support cash payout.”

What have the Nigerians done? Turn to Bitcoin remittances, of course.

Another example:

“In Zimbabwe, several restrictive monetary policies have led to the growing interest and use of bitcoin for remittances. First, the government banned all foreign currencies such as the US dollar, Euro, South Africa rand, and others. The government also placed restrictions on mobile money services, as well as daily withdrawal limits because of severe fiat currency shortages. To bypass these restrictive policies by the central bank, a growing number of Zimbabweans prefer bitcoin remittances to fiat money.”

Remittance Revolution, Factor 3. Weak Currency

This factor wasn’t present in El Salvador, which is a dollarized country. However, in Africa, there are several “countries that experience double-digit inflation such as Zambia, Zimbabwe, Nigeria, Sudan, South Sudan, Ethiopia, Liberia, and Sierra Leone.” For example:

“The Guinean franc is one of the world’s weakest currencies as we launch into 2022. In 2020/21, the Zambian kwacha and Zimbabwe’s dollar were one of the worst performing currencies in the world. The Nigerian naira has lost more than 50% of its value since 2015. The Central Bank of Nigeria devalued the naira thrice in 2019. In May 2021, the central bank devalued the naira by 7.6%.”

What have the Nigerians done? Adopt Bitcoin remittances. What will the other countries do? Adopt Bitcoin remittances, also.

Factor 4. Transfer Fees And Speed

The remittance fees were a prominent factor in the El Salvador story. And in Africa, the story repeats itself:

“A study by the World Bank shows that transfer fees to Sub-Saharan Africa, the poorest region in the world, are the highest in the entire world. The cost of sending $200 to Sub-Saharan Africa towards the end of 2020 was 8.2% on average. Sending money within Africa is even more expensive.”

What will the whole Sub-Saharan Africa do?

Remittance Revolution, Factor 5. Education

This is a positive one, for a change. According to BTrust’s Abubakar Nur Khalil, in a recent article for Bitcoin Magazine:

“Africa is home to more than a thousand indigenous languages, with non-English speaking countries. The majority of Bitcoin material available is in the English language, which means we must also engage in translation efforts to unlock knowledge for millions of non-English speakers on the continent, both on the developer and user front.

Currently, there are efforts around Africa to translate Bitcoin material into different languages such as Amharic, Arabic and Wolof by Kal Kassa, Arabic_HODL and Fodé Diop, respectively, with ongoing work on others.”

Related Reading | South African Man Loses $900,000 Worth Of Bitcoin After Accidentally Deleting Keys

And we also have to mention Exonumia, who is “creating open source African language translations for Bitcoin literature through community.” And, of course, the BTrust. The organization created and financed by Jay-Z and Jack Dorsey is on a mission to promote Bitcoin development in Africa and India. One of its board of directors members, Abubakar Nur Khalil, recently spoke to Bloomberg Technology about the initiative.

Conclusions And The Market

There are negative factors that affect Bitcoin positively, like high fees, weak currencies, and worse government policies.  And there are positive ones, like high mobile adoption and available education. The mix might form a perfect storm for Bitcoin adoption in Africa. And the Bitcoin remittances revolution is leading the way.

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Zimbabwe Refutes Plans to Embrace Bitcoin (BTC) as Legal Tender

by CryptoPotato

El Salvador’s adoption of Bitcoin as a legal tender has spurred many debates and discussions on the potential financial ramifications. But it seems like Zimbabwe is not planning to follow in the footsteps of the central American country any time soon., despite the recent reports claiming otherwise.

CBDCs Yes, But No Bitcoin

While denying the previous report, the government has stated that the Zimbabwe dollar (ZW$) will remain the only official currency. Zimbabwe’s Minister of Information, Publicity, and Broadcasting Services, Monica Mutsvangwa, also dismissed the claims while addressing the Cabinet meeting yesterday and was quoted saying that cryptocurrency would not be a local currency.

The information minister, however, revealed that Zimbabwe is also experimenting with digitizing its sovereign currency.

“Like most countries in the world, the Government of Zimbabwe, through its Financial Technology Group, is studying Central Banking Digital Currency as opposed to cryptocurrencies, bitcoins or any form of derivatives,”

It doesn’t come off as a surprise Zimbabwe too is keener on CBDCs, considering regulators around the world are exploring the same avenue in response to the burgeoning cryptocurrency industry. As many countries ramp up their CBDCs experiments, Africa isn’t far behind. For instance, the Bank of Ghana had recently announced the pilot of “e-cedi.” Additionally, Nigeria’s eNaira also debuted in the last week of October.

Stance On Cryptocurrency

The latest clarifications follow reports about the government considering the use of Bitcoin (BTC) as a legal payments option. It had earlier mentioned that the country’s move rose from the growing demand to harness the technology.

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The report in question had also quoted Charles Wekwete – the permanent secretary of the president’s office. Wekwete had allegedly commented that the government was considering Bitcoin’s adoption with the help of private sector organizations.

Finance and Economic Development Minister Mthuli Ncube, for one, had earlier said that cryptocurrency would not be used as a currency in the country. However, the Professor is not entirely anti-crypto.

In September this year, Ncube had maintained that he was not into the idea of crypto being used as a “transaction currency” because of its high volatility. Still, he believes that there is nothing wrong with exploring the asset class to understand its viability.

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Zimbabwe minister signals CBDC interest amid Bitcoin adoption rumors

by Cointelegraph

Zimbabwe’s Minister of Information publicly dismissed ongoing rumors about the country considering the adoption of cryptocurrencies and Bitcoin (BTC). Rather, Minister Monica Mutsvangwa clarified that the government of Zimbabwe is keen to experiment with a central banking digital currency (CBDC).

The rumor about Zimbabwe’s crypto adoption was sparked based on numerous reports quoting Charles Wekwete, Permanent Secretary of the President’s office, saying that the government was in talks with the private sector businesses to help introduce cryptocurrency in the country.

Just one day after the reports, Mutsvangwa took to a cabinet briefing to dismiss the ongoing crypto adoption claims:

“Government would like to assure the nation that it is not considering introducing another currency in the economy as reported in some sections of the media. Our local currency is the Zimbabwe dollar (ZW$) and not cryptocurrency.”

Moreover, the minister clarified that the government of Zimbabwe is following the footsteps of other countries by studying “CBDC as opposed to cryptocurrencies, bitcoins or any form of derivatives.” 

It is important to note that CBDCs are digital tokens issued by a government’s central bank. If launched in Zimbabwe, the digital tokens will be pegged with the Zimbabwe dollar and will have the monetary value of the local currency in real-time.

Governments around the world are experimenting with retail and wholesale CBDCs to find cheaper cross-border payment alternatives while increasing their ability to track transactions to deter money laundering and other fraudulent activities.

Related: Ghana to explore offline transactions for upcoming CBDC

CBDCs are now being looked at by many governments in Africa as a tool to speed up their financial inclusion initiatives. Most recently, Ghana joined the growing list of African countries that are currently experimenting with CBDC use cases.

As Cointelegraph reported, the CBDC developed by the Bank of Ghana, the e-cedi, will support offline transactions. According to the bank’s head of fintech and innovation, Kwame Oppong, “The e-cedi would be capable of being used in an offline environment through some smart cards.”

The offline transaction feature of Ghana’s CBDC aims to catalyze the technology’s adoption in regions that lack reliable access to electricity and internet connectivity.