Zimbabwe Hyperinflation Deja Vu As New Fiat Introduced Earlier This Year Already Failing And Being Replaced, Highlights Need For Bitcoin (BTC)

November 16, 2019 / by Crypto.IQ

Zimbabwe’s fiat currency is collapsing, again, highlighting the need for Bitcoin (BTC) in the country. Unfortunately for Zimbabweans, the government there has banned foreign currencies and has made it extremely difficult to obtain cryptocurrencies as well. 

For years the Zimbabwean Dollar (ZWL) inflated and then hyperinflated, and was re-denominated, i.e. zeros had to be chopped off, three different times. ZWL 1 of the final version of the currency was worth ZWL 10^25 of the original currency before the re-denominations, and even the final version ended up trading at an exchange rate of ZWL 669 billion per USD before being abandoned in 2009. Inflation hit 79.6 trillion percent right before the abandonment of the ZWL.

This astonishing hyperinflation was caused by the government printing money out of control, and ultimately this is equivalent to the government robbing all of the citizens.

A decade later in February 2019, the Zimbabwean government launched a new fiat currency called the RTGS Dollar, and this is also called the Zimdollar or Zollar. It is backed by bonds and bank balances.

However, less than a year later the RTGS Dollar is already failing with inflation topping 380%, indicating that the government once again printed money without making sure every RTGS Dollar was backed.

Now Zimbabwe is launching yet another fiat currency. The new currency that Zimbabwe is launching is even worse, with no backing at all, just like the old ZWL. Indeed, this new currency is being called the Zimbabwean Dollar, the same name as the currency which was abandoned in 2009. 

Citizens lined up for hours to receive the new Zimbabwean Dollar, only to go home frustrated because the withdrawal limit per week is equivalent to only 20 USD. 

Overall, it seems the government is setting the stage to repeat the same hyperinflation scenario again in Zimbabwe, which will ultimately transfer all of the wealth of the citizens to the government.

Bitcoin (BTC) could solve all of these problems, but the government has made it illegal for banks to facilitate Bitcoin (BTC) transactions, as well as any other foreign currency transactions. Therefore, Zimbabweans have to choose between breaking the law by obtaining crypto and foreign currencies on the black market, or living in total poverty no matter how much they work.

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