While major Western economies are grappling with inflation rates not seen in more than 40 years, there are countries that have had to live with triple-digit inflation rates for years, such as Lebanon and Zimbabwe, which share the unenviable last place on the list of countries most affected by this problem.
Zimbabwe and Lebanon could combat inflation with Bitcoin
This past year, Lebanon at 211% has surpassed Zimbabwe, which stands, by contrast, at 192%.
For Lebanon, May’s is the 23rd consecutive rise in inflation.
This situation is also aggravated by the inability of politicians to form a government to try to curb an out-of-control situation. Similar situation is being experienced by Zimbabwe, which has long been considering adopting digital forms of payment to remedy its very serious hyperinflation problems, such as the Zash currency.
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— ZIMBOCASH (@zimbocash) May 19, 2022
The crypto market in Africa
According to Chainalysis, the African cryptocurrency market has grown by more than 1,200% year on year and has some of the highest adoption rates in the world. Kenya, Nigeria, South Africa and Tanzania ranked among the top 20 in their global cryptocurrency adoption index, Zimbabwe.
Retail transfers were also above the global average in the region, and Africa ranked first in the world in the use of peer-to-peer exchanges, indicating a high adoption rate from the bottom up.
Zimbabwe, in November 2021, had to deny news of the forthcoming legal adoption of Bitcoin, like what happened in El Salvador. But what is certain is that there is an advanced state project of a new state-owned digital currency (CBDC) in the country.
Last September, Zimbabwe’s Finance Minister Mthuli Ncube said he was very much in favor of the use of cryptocurrencies, especially as a useful tool for remittances from abroad. He added that about 30% of the country’s youth had already invested in cryptocurrencies.
Crypto mining in Lebanon
Lebanon has reportedly seen a cryptocurrency mining boom in the past year, as explained by the CEO of one of the country’s leading mining companies, Mark Iskandar, founder and CEO of Magmamining:
“The idea of a decentralized network and the people who own it is what has influenced many people in Lebanon to invest in Bitcoin mining”.
The Darwazah Center for Innovation Management & Entrepreneurship (DC) at the Olayan La School of Business (OSB) of the American University of Beirut (AUB) organized a meeting last week to explore possible solutions, precisely through blockchain and cryptocurrencies, to the country’s very sensitive economic issue.
DeFi’s Swiss lawyer who attended the event, Fatemeh Fannizadeh, said:
“The crypto approach and technology unlocks new means of governance of financial services that we have never seen before, and we have the opportunity to build it from the ground up by empowering ordinary people who have never had the opportunity to do so”.