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RBZ Considers Cryptocurrency Amid Currency Challenges

 RBZ Considers Cryptocurrency Amid Currency Challenges

The Reserve Bank of Zimbabwe (RBZ) has disclosed that cryptocurrency was among the options considered to address the rapid depreciation of the Zimbabwe dollar, shedding light on the country’s ongoing efforts to stabilize its currency.

RBZ Governor John Mushayavanhu revealed this information during a post-monetary policy review breakfast meeting organized by the Zimbabwe Independent in Bulawayo. The creation of the proposed new currency, Zimbabwe Gold (ZiG), was presented as a culmination of extensive consultations conducted across various sectors.

The Zimbabwe Independent, a part of Alpha Media Holdings that includes NewsDay, The Standard, and online broadcaster HSTV, hosted the event where Mushayavanhu elaborated on the decision-making process. He noted that consultations involved experts from entities such as the World Bank, Zimbabwe International Trade Fair Company, and Zimbabwe Investment and Development Agency, with notable figures like Busisa Moyo, the chairperson of Zimbabwe Investment and Development Agency, playing a role.

The acknowledgment of cryptocurrency as a potential strategy reflects the RBZ’s willingness to explore innovative solutions amid economic challenges. The move also underscores the complexity of managing currency fluctuations and the importance of strategic partnerships in navigating financial landscapes.

ALSO READ: New ZiG currency depreciates by 19,7% on the black market as police go after illegal money changers

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“Normally, ‘whispers behind the throne’ should not be known but I guess I bear some responsibility. But, maybe I just need to cast back a little bit. At the time when we were looking at various options, we really had a few choices, maybe four. We could have stayed where we were with the ZWL$ (Zimbabwe dollar) but that was not working,” Moyo said, who was also speaking at the breakfast meeting.

“Hyperinflation, IAS21 or 29, it was a headache for accountants and for people looking for financial information from outside. The IT guys were having a tough time…We just could not stay where we were. Governor, you did not reveal that it is you who makes the choice.

“The IMF (International Monetary Fund), the World Bank and economic actors like ourselves give you input, but you have the unenviable task and difficult task of choosing all this advice which you are going to hear more today and choose which one [is the best]. But, we only had three choices.”

Moyo suggested an alternative approach: following Zambia’s example from 2013 by removing zeros to rebase the currency, a tactic aimed at addressing market and economic volatility.

“But, really, we could not have that because it was going to bring back some trauma of zeros so we said okay skip that, we cannot remove zeros on the ZWL$ and stay there. The other choice was to dollarise, but Dumisani (Dumisani Sibanda, an economic analyst) has already spoken on why we could not dollarise,” Moyo said.

“Because, from a business point of view, the manufacturing sector where I come from, we know the pain of dollarisation so we could not stay with dollarisation. Then the third choice really was what you (Mushayavanhu) then chose. Another instrument in the basket of currencies or arsenal of investment instruments, cryptocurrencies, gold coins or ZiG, and ZiG was already existing, so we went that route, or you picked that choice.”

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