Zimbabwe’s finance minister has discussed at length the benefits of crypto-currencies in the payments sector.
Mthuli Ncube, Zimbabwe’s finance minister, made the case for crypto-currencies following a visit to the DMCC Crypto Centre in Dubai. He acknowledged the ease of use that crypto presents, noting that crypto-based solutions would go a long way in reducing the costs incurred in facilitating remittances from abroad.
“I visited the DMCC CRYPTO CENTRE in Dubai, which is a fascinating incubation centre for crypto-currencies and payment solutions. I discovered solutions that could reduce the costs of sending remittances from the diaspora,” the Zimbabwean minister tweeted.
While many have only seen the benefits that Zimbabwe could gain from the adoption of crypto-currencies, some social media users have called for caution. One user claimed that the country’s banks were notorious manipulators of the foreign exchange market and that the adoption of crypto-currency could cause a collapse of the Zimbabwean dollar.
“When the banks stop manipulating the forex exchange rate, then maybe the RBZ can consider crypto-currency. Otherwise, it will lead to a massive crash of the ZWL”.
It also didn’t seem like Minister Ncube really had a feel for what was happening on the ground in Zimbabwe. Members of the crypto-currency community were quick to point out that there were already crypto-currency startups in existence to carry out the crypto-currency solutions he was advocating. Flexfintx CEO Victor Mapunga pointed out the existence of these startups to the minister.
“We already have blockchain & crypto companies in Zim like @Flex_Tx, work with local players”.
A report by Techzim also seemed to suggest that the minister was not informed on crypto issues in Zimbabwe. The report questioned the need to look for solutions in the UAE when the country already has startups such as Zimbo Cash, Uhuru Wallet and Dystater that offer faster and cheaper crypto solutions to simplify cross-border money transfer.
At the time of his appointment in 2018, Ncube became a strong advocate of crypto-currencies. He pushed for the use of these digital assets to help Zimbabwe’s failing financial system. At the time, the finance minister proposed that Zimbabwe should follow Switzerland’s lead by adopting solutions.
Noting the importance of innovation, he said more often than not, central banks were lagging behind in exploring these technologies. He promised to push the Reserve Bank of Zimbabwe to create a crypto division aimed at investing in and understanding Bitcoin. This, he explained, would help major banks in the country understand digital assets.
The adoption of the crypto currency could go a long way in stabilizing Zimbabwe’s economy. The store of value of crypto-currency would likely overcome the extreme levels of inflation and economic turmoil in the country.