As reported by several local media, the total ban on the use of foreign currency in the African state of Zimbabwe triggered a huge bitcoin (BTC) rally, to the extent that the price on the well-known LocalBitcoins platform exceeded $75,000 per coin. This is an inflation of almost 600% of the current price.
Why is Zimbabwe choosing bitcoin?
Since last week, the Zimbabwean government has decided to stop transactions in the US dollar and reintroduce the Zimbabwean dollar, which had disappeared completely in 2008 due to very high inflation.
In 2017, Zimbabwe officially banned cryptocurrencies and prohibited their circulation within its state. The only way in which citizens can take possession of bitcoin (BTC) is via P2P exchanges, such as the well-known LocalBitcoins platform.
Already at that time, also due to economic problems, the price on LocalBitcoins rose considerably, guaranteeing huge profits to the sellers.
The CEO of Azte.co, Akin Fernandez, has tweeted against local government decisions, reiterating that money is a service that should be provided exclusively by the market and never by the State.
Replace "USD" in this story with "Bitcoin" and you get a glimpse into the future of not just Zimbabwe, but every country on earth. They're right to reject these measures wholesale. Money is a service that should be provided exclusively by the market, and never by the State. https://t.co/20t0I2bPno
— Beautyon (@Beautyon_) June 26, 2019
Increasing volumes on P2P platforms
Although data for Zimbabwe’s Bitcoin exchange is not available, according to statistics from Coin Dance, LocalBitcoins’ global volumes have reached new records.
The Bisq (formerly Bitsquare) decentralised exchange also saw a significant increase in trade. In the seven days prior to June 29th, it recorded volumes of over $10.7 million, breaking last week’s record of $6.1 million.
Zimbabwe is not the only country in a difficult situation. For example, Venezuela as well, because of the hyperinflation of its currency, is increasingly placing its trust in cryptocurrencies. In the South American state, peer-to-peer exchange platforms such as LocalBitcoins are also being used.