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New Finance Minister in Zimbabwe Pushes for New State-Backed Crypto Unit

According to the new finance minister of Zimbabwe, Mthuli Ncube cryptocurrencies can solve the problem of a cash crunch in South African countries.

Mthuli Ncube, the newly appointed finance minister also said that he will push the central bank to create digital currency so that the country can come out from the on-going problem of cash shortage. Mthuli is also planning to establish Digital Money Department of the Reserve Bank of Zimbabwe (RBZ). The main goal behind establishing digital money department is to assist the banks to better understand digital assets. The finance minister also believes that the country must also invest in the field of blockchain technology and cryptocurrencies. In near future, Zimbabwe could be in the list of countries which have their own cryptocurrencies.

According to Ncube, usually central banks are too slow to understand and invest in the latest technologies. Some central banks such as Swiss central bank are so fast in adopting innovations; they are continuously investing in understanding Bitcoin. Switzerland is known as Crypto Valley where you can find 200-300 virtual currency entities. Adoption of cryptocurrencies can solve the economic problems of Zimbabwe.

The IMF has predicted that the inflation of South American country, Venezuela will hit 1,000,000% this year. Venezuela has also created digital currency petro to deal with hyperinflation. Many crypto purists believe that petro is not a true cryptocurrency because it is issued by a centralized government and it is also backed by the oil reserves of Venezuela. Now we have to see what difference will the introduction of petro makes to the economic woes of Venezuela.

Zimbabwe is also facing hyperinflation and liquidity crunch. The declining demand for Zimbabwean export is exacerbating the problem. Government is financing the spending by over issuing treasury bills. Overissuance of treasury bills and declining export has forced the banks to impose withdrawal limits. To ease the cash shortage RBZ has even imported over $400m in this year but still, the citizens have to travel to South Africa to access cash from international banks.

According to Ncube, the solution to all these problems is digital currency so the government has to explore the Bitcoin and other cryptocurrencies. Mthuli Ncube has faced an opposition from Reserve Bank of Zimbabwe (RBZ) because RBZ believes that the introduction of crypto will support the unregulated trading, money laundering, and terrorism. If Zimbabwe will go ahead with the cryptos than it will become the first nation to openly investing in cryptocurrencies.