In a sudden political move, Zimbabwean President Robert Mugabe caused disruption on the US dollar/bond note parallel exchange rate and Bitcoin price in Zimbabwe. This happened immediately after putting his deputy Emmerson Mnangagwa out of his position.
The aforementioned digital currency was already trading at high inflation rate in the country as the demand for it rose up exponentially since everyone is looking for a potential alternative for its troubled monetary currency. At the moment, inflation has hit almost a hundred percent and is worth around $13,000 per coin.
Trading in uncertainty
Naturally, with this newest political coup by the established leader, the almost non-existent and frail fiat currency system of the country has been the subject of much speculation and questions. Zimbabwe’s bond notes are linked to the US dollar and have a 62 percent premium, thus pushing traders to leave their monetary assets.
Because of this, investors are looking for a different option to leave the country and their currency shortages—like Bitcoin, which is becoming the strongest available alternative.
Collapse of Banking
The troubled African country’s monetary system is starting to collapse, and as moving money out of Zimbabwe is proving to be harder by the minute, citizens are trying to dodge the collapsing state of the situation, looking for security through Bitcoin.
Soon after, banks in Zimbabwe said that Visa debit cards won’t be of any use if prior arrangements and pre-funding of a tangible currency is made before any payment or transaction. Econet Wireless has also ceased foreign transactions on its mobile money credit card that is connected to MasterCard.
Shelter through cryptocurrency
Because of the upheaval of Zimbabwe’s fiat currency system, Bitcoin’s premium hit 100 percent as more and more people are fleeing unto it. The recent surge in price is not caused by political issues, but rather because of high demand and fear of collapse in the monetary system.