The Zimbabwe government suspended all mobile payments, including operations by the dominant provider Ecocash on Friday (26). The Zimbabwe Stock Exchange was also ordered to stop trading, in a dramatic escalation of the country's currency crisis.
The government claims that the measure is to avoid a conspiracy to sabotage the collapsing Zimbabwe dollar. But millions of Zimbabweans rely on digital payment operators because getting physical cash is very difficult. Ecocash is also used to buy Bitcoin.
In response, Ecocash promised to challenge the ban. He says that only Zimbabwe's central bank can order it to stop trading. Meanwhile, the African news portal Bitcoinke claims that "demand for Bitcoin has skyrocketed" after the suspension – its sources say the cryptocurrency is being sold 18% above the market price.
A national currency, the Zimbabwe dollar or Zimdollar, was reintroduced in 2019, replacing a basket of national currencies, including the Japanese yen, the US dollar and the pound sterling. To force citizens to leave the previous system, the government has banned the domestic use of foreign currencies. But – with the government mired in corruption scandals – it quickly lost ground to the US dollar. This is the fifth time in Zimbabwe's history that its national currency has collapsed.
Meanwhile, inflation has risen above 750% and the local stock market has risen as investors have sought refuge.
Many Zimbabweans resorted to digital payments and, in 2019, mobile wallets represented almost 85% of all transaction volumes and 22.6% of value, according to the country's central bank.
The government claims that mobile payment operators and the stock exchange are deliberately or inadvertently acting to sabotage the economy and are the cause of the volatile exchange rate on the Zimdollar black market. Ecocash denies any wrongdoing.
* Translated and republished with authorization from Decrypt.co
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