Many countries around the world are dealing with inflation. With prices rising, some countries are not coping. Among them, Zimbabwe is currently awsh in losses, lack of capital and sanctions. While the local currency does not help the country, bitcoin may be the best option for its economic stability.
The country with the highest annual inflation rate in the world?
Like many developing countries, Zimbabwe is facing a number of economic problems and inflation is not helping matters. In fact, since the phenomenon began, many governments have faced massive price rises. Every continent is suffering from market pressure. However, developing countries are certainly the most affected. In fact, Zimbabwe is recording the highest rate of inflation and the population is starting to worry.
In mid – November 2008, the country recorded 89.7 sextillion% of the inflation rate. It currently has the highest measured annual inflation rate in the world. How did it happen? The problems arise at different levels. But surely the most urgent thing is that there is no currency that evolves over time. In fact, the official currency of Zimbabwe, RTG is a pseudo-currency that offers very little possibilities. It can only be used locally so it cannot be used for international trade.
The sanctions that the country has hit for over a decade are not helping it economically either. As a result, external banking relations are relatively limited. Traders are then forced to sell their products within the country as it becomes increasingly difficult to buy or sell them across borders. Since the sanctions were imposed, Zimbabwe has lost more than 100 banking relations so it can no longer transact from any country.
Bitcoin volatility could save the Zimbabwean economy
Many African countries are economically underdeveloped. Indeed, the lack of a highly capitalized currency prevents countries from effectively expanding economic and trade strategy with the major powers. Central African countries, for example, are under the captivity of the CFA franc. For those who have their own currency, it is not in line with Western fiat currencies.
As a result, transactions with foreign countries often tend to impoverish these countries and increase their debt. The Central African Republic understood this and adopted bitcoin (BTC) as its official currency alongside the CFA franc. Therefore, the country can easily negotiate with external banks and trade at equal exchange rates. In the face of inflation and sanctions, Zimbabwe could also improve its economic situation through the use of bitcoin.
Governments are even more vigilant about crypto and BTC assets. The flagship cryptocurrency is a deflationary currency, so its value is realized over time. At the moment, its price has dropped almost 70% from its all-time high. However, it’s up from last week according to Tradingview chart. When volatility comes in, bitcoin could enable Zimbabwe to achieve a higher standard of living and create thriving industries.
The current inflation in Zimbabwe is pushing the country into economic collapse. In addition to the limited transactions with the outside due to the sanctions, the huge increase in market prices greatly reduces the quality of life of the populations. Bitcoin could help the country go through this bad patch. However, the government considers it an illegal currency.
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The world is changing and adaptation is the best weapon to survive in this turbulent universe. As a crypto community manager at the base, I am interested in everything directly or indirectly related to the blockchain and its derivatives. To share my experience and share an interesting field for me, there is nothing better than writing informative and reassuring articles at the same time.