Hyperbitcoinization? Bitcoin Trades At 85% Premium In Zimbabwe - Priced At $7,200

While bond notes were put forward as a panacea to diminish the flight of wealth from Zimbabwe... (as Steve Hanke noted, it was not)...

We noted in June that the cash crisis continued unabated.

Those awaiting cash transfers at a bank may wait a month to be cleared and, even then, the transfer may be refused.

The Standard, Zimbabwe’s leading Sunday newspaper, ran an article at the time entitled, “Black market thrives, as banks run dry.”

Some highlights from that article:

HARARE’S Road Port has become the unofficial bank of last resort, never short of cash, no queues and a multicurrency platform. The money market at this busy bus terminus now plays the role that the formal banking sector has failed. It is effectively making a mockery of the Reserve Bank of Zimbabwe (RBZ).

This points to the nature of black markets. They thrive based upon fulfilling an existing need, not upon government control. They therefore replace whatever services the official market fails to provide.

“Top government officials, supermarket owners and service stations were behind the thriving black market, which is never short of cash.”

And now it appears many Zimbabweans have found an alternate way to store/transfer wealth away from Mugabe's prying (and confiscatory) eyes.

As CoinTelegraph reports, as the country appears to be headed toward another bout of hyperinflation,citizens are turning to dollars and Bitcoin.

The use of Bitcoin in Zimbabwe has grown exponentially as the government has begun to stop all credit card payments and has restricted the flow of cash into and out of the country.

People wishing to make payments for vehicles have been forced to use Bitcoin and car lenders are happy to accept.

In all the chaos, the price of Bitcoin on the local exchange, BitcoinFundi, has soared to $7,200.

This premium reflects a frantic desire to find ways to transact within an economy where government controls have made traditional means impossible.

image courtesy of CoinTelegraph

As TechZim reports, as ‘hard currency’ disappears from the street, the demand for alternative payment options such as bitcoin will but increase, resulting in the rate increasing further.

Those that are using BTC as a means of sending money back to Zimbabwe will be excited with this rate, not only smiling all the way to the bank but back from it too...