Stories of hyperinflation in various countries have been mounting in recent days. As citizens face the reality that their country has devalued its currency, they are forced to take backpacks of cash to buy a loaf of bread.
Within these devalued currency environments, other forms of money–stable ones–are welcomed. Zimbabwe is one such nation. There, hyperinflation reached a critical point in 2008, and is threatening again. The country appears to be headed toward another bout of hyperinflation and citizens are turning to dollars and Bitcoin.
Bitcoin in Zimbabwe
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.
Recent reports from Venezuela, where hyperinflation is actively routing the economy, indicate that a similar rise in Bitcoin usage has taken place. Citizens have been forced to turn to non-governmental sources for business purposes, leading to suggestions that such economies could face ‘Bitcoinization’.