Zimbabwe’s Finance Minister Eyes Cryptocurrency Adoption To Solve Cash WoesSep 17, 2018 at 23:19
Zimbabwe’s Finance minister is making a push for the central bank to put up a cryptocurrency unit to help solve the cash woes of the country.
Finance Minister Mthuli Ncube said the cryptocurrency could help mitigate Zimbabwe’s ongoing cash shortage, IT Web Africa reported.
He said the central bank should embrace innovation such as digital currencies to spur investments in that sector.
In proving his point, the Finance minister cited the Swiss central bank, which has made an early adoption of Bitcoin and other cryptocurrencies.
“One can pay for travel using bitcoin in Switzerland. So, if these countries can see value in this and where it’s headed, we should also pay attention. We have innovative youngsters so the idea shouldn’t be to stop it and say don’t do this, but rather the regulators should invest in catching up with them and find ways to understand it, then you regulate it because you now understand it”, he added.
Zimbabwe’s liquidity and cash problems stemmed from dwindling Nostro accounts—or foreign currency accounts—due to the drop in exports as well as excessive issuance of treasury bills to fund government spending.
This drove local banks to impose caps on withdrawals which, in turn, drove people to hold on to their cash or put their money in foreign banks.
However, Ncube’s progressive proposal runs parallel to the conservative view of the Reserve Bank of Zimbabwe (RBZ) on cryptocurrencies.
The central bank had previously urged banks to avoid cryptocurrencies since it is still unregulated.
Cryptocurrencies are still not recognized as legal tenders in Zimbabwe and there are concerns over the use of the digital tokens in money laundering and terrorism, RBZ said.