The battle to control currency in Zimbabwe inadvertently boosts Bitcoin profile. Owned by banks, Zimswitch is the latest exchange of payments for the same financial institutions. This designation was ostensibly made to enable interoperability among financial service providers.
The Reserve Bank of Zimbabwe (RBZ) says in a notice to the public Thursday that all financial services providers including mobile money operators (MMO) must connect to this national payment switch.
The country’s largest MMO, Ecocash appears to be the target of this move by RBZ. Ecocash’s critics say the MMO does this to preserve its monopoly, a status it gained after investing heavily in building its infrastructure.
Ecocash’s dominant position has long been a source of tension with regulators and now government. Despite the threats and directives, Ecocash has steadfastly refused to be cowed into relinquishing its dominant position.
Faced with stringent foreign exchange regulations some Zimbabweans are switching to bitcoin when making payments across borders. This is due to the fact that Bitcoin is faster, unregulated and users have absolute control over it.
The government cannot control or suspend cryptocurrency as it has done with Ecocash. Bitcoin is also immune to local inflation which, according to John Hopkins Economics professor, Steve Hanke, now exceeds 1000% per annum.
Some foreign nationals are now also using bitcoin when remitting funds back to their home countries.
[image: Tatenda Mapigoti]