Zimbabwean authorities’ ongoing tussle with mobile money operators (MMO) reached a crescendo when a government official shocked the world by announcing a suspension of this service.
The suspension, which took immediate effect, was immediately rebuffed by Ecocash, the largest of the three mobile money operators (MMOs). Sensing potential divisions within the ranks of regulators, Ecocash quickly called out this irregular and potentially illegal announcement.
In a statement attributed to Ecocash, the MMO says it is only guided by instructions from the country’s central bank, the Reserve Bank of Zimbabwe (RBZ).
A Confusing Stance on Mobile Money Creates Uncertainty
The RBZ issued its belated statement wherein it regurgitates accusations against MMOs leveled by the government. In its statement, the RBZ says MMO agents that enable cashing in (deposits) or out (withdrawals) are indeed suspended.
Nevertheless, the central bank appears to take a more conciliatory approach as it tried to walk back the most contentious aspects of the government announcement. The RBZ clarified that regular transactions like payments to merchants or between peers remain active.
This clarification, while adding to the confusion, was largely expected. The earlier announcement had been made against the background of long-standing and biting cash shortages.
Mobile money, which now accounts for more than 80% of all national micropayments, has largely filled the void created by cash shortages. Some argued that had the initial suspension order stood, a serious crisis would have ensued.
Nevertheless, it seems that there are other factors at play that seem to feed this animosity between MMOs and regulators. Ecocash, which is owned by Zimbabwe’s largest mobile network operator, Econet Wireless, enjoys a lion’s share of the mobile money market.
It is this monopolistic position that appears to be the source of Ecocash’s constant fights with regulators. Ecocash has a massive agent network infrastructure making it the most popular payment platform in the country.
The RBZ has been using different tactics including suspension of Ecocash alone in 2019 as it tries to curtail the influence of the MMO.
Consequently, the two have faced off numerous times in local courts over the past twelve months. Against this background, it would appear the assertions that RBZ’s persistent efforts to tame Ecocash are premised on a desire to kill off this innovative solution to financial exclusion.
Necessity The Mother of Innovation
The success by Ecocash in Zimbabwe potentially exposes the RBZ’s lack of foresight and an unwillingness to adapt. Furthermore, the success of MMOs will only encourage others to bring forth their own innovative solutions.
Indeed the last few years have seen several fintech companies emerging. Each, bringing their own ideas of how they intend to solve the problem of financial exclusion.
However, it appears the fintechs are coming up against standing regulations that are essentially anti-innovation. Moreover, banks still observe a 2018 directive to stop the facilitation of Bitcoin to fiat exchange.
It is this directive that forced earlier Bitcoin adopters as well as crypto traders to go underground. Cryptocurrency trading deals are now initiated in social media messaging applications while transactions are typically settled peer to peer.
While Zimbabwe has a few cryptocurrencies users, events over the past few months have sparked a growing interest by those seeking to shield their wealth from the runaway inflation.
Cryptocurrencies are not only denominated in US dollars—which are seen as a stable currency by Zimbabweans—but are censorship-resistant.
Some Zimbabweans now realize that their government cannot suddenly suspend the use of Bitcoin (if it becomes widely used) just as it has done with mobile money. This knowledge might be responsible for the steady growth of Bitcoin or altcoins being demanded or swapped with USD.
Before the latest suspension directive, some peer to peer traders accepted mobile money due to the ease with which it can be converted into USD.
Additionally, mobile money makes it convenient for traders to swap digital assets without having to meet face to face.
However, a recent RBZ warning against advertising or soliciting for foreign currency via Whatsapp chat groups spooked crypto traders. Some were already scaling back on accepting mobile money when the government made the surprise announcement.
The latest directive might now force more traders to exit from public trading groups. However, if anything, this directive will instead spur more trading between peers. The only difference it will be harder for everyone to detect or to know the level of trading.
Zimbabwe’s challenging economic environment and the tough foreign currency regulations might have increased the utility of cryptocurrencies.
For instance, there are reports that a start-up, YoLft Technology, which is based in South Africa, recently launched a stable token known as Uhuru.
This token is housed on the Stellar Blockchain and it enables Zimbabweans working in South Africa to send money home at a fraction of regular costs.
The token is easily convertible to the South African Rand currency. Some business people are opting to make payments directly to suppliers in South Africa using this token.
This decision by some businesses further cements Zimbabwe’s credentials as an ideal place for cryptocurrency adoption.
Changed Stance on Cryptocurrencies
While the RBZ itself has since, the last quarter of 2019, made overtures to the crypto community, observers remain deeply skeptical. They point to the longstanding directive that crippled Golix—the country’s one-time number one cryptocurrency exchange—which remains in force.
That is also a point emphasized by a UK based blockchain and cryptocurrency enthusiast, Prosper Mwedzi.
A Zimbabwe native, Mwedzi also believes the decision to cut off millions from their mobile money wallets works in favor of cryptocurrencies. However, he insists that there will be no movement as long the 2018 moratorium remains in place.
Meanwhile, a Bitcoin trader who did not wish to be identified asserts that there is a positive correlation between government censorship and interest in cryptocurrency.
He says he has been seeing a gradual increase in the number of people asking for Bitcoin in particular.
Nevertheless, it should not be forgotten that Zimbabwe’s hyperinflation is another driver of cryptocurrency adoption. The unprecedented government action against Ecocash will ultimately force its citizens to see Bitcoin as the best shield against the out of control hyperinflation.
The Zimbabwe dollar (Zwl) has depreciated by more than 100% since mid-June. It now trades at 63 Zwl for every American dollar.
Before the start of the foreign currency auction system, the exchange rate had been fixed at 25 Zwl for every one dollar.
Hyperinflation, which effectively renders the Zimbabwean Dollar worth less and less, is getting ever closer a 1000% per annum. This inflation rate makes the Zimbabwean hyperinflation the second worst to that of Venezuela.
Choosing Bitcoin or cryptocurrency as a shield is only a natural choice in this case.
The post Zimbabwe’s Mobile Money Ban And The Impact On Bitcoin Trading appeared first on BlockNewsAfrica.
Cuba to Fight Financial Disturbance by Potentially Adopting Crypto
The government officials of Cuba examine crypto adoption as an instrument to overcome financial turbulence in the country. This comes a few weeks after the Cuban authorities started discussing the implementation of digital assets in the economy.
Crypto vs. Monetary Turmoil
The economic situation on the island of Cuba suffered heavy setbacks due to the consequences of the COVID-19 pandemic. Moreover, the government implemented crippling sanctions on the residents, which had a catastrophic effect on the local economy.
As Periodico Cubano reported, the president of Cuba – Miguel Díaz Canel – together with the country’s authorities, now plan to face these issues with the help of cryptocurrencies. According to the coverage, Díaz Canel discussed the possible benefits of crypto adoption in the country.
Additionally, he revealed his intentions to ”keep informing the public” about any implementations regarding the matter. However, Díaz-Canel alerted about the ongoing crypto scams on the island, calling them ”investment pyramid schemes.”
The president’s intentions did not come as a surprise. Last month the Congress of the Communist Party of Cuba (PCC) put ahead proposals that might contain finding out how digital assets can boost the shattered economy of the country.
Back in 2019, the Cuban authorities made a similar announcement on how cryptocurrencies can deal with the country’s monetary issues. The Minister of Economy and Planning then said:
”We are considering studying the application of cryptocurrencies in national and international commercial matters. Measures of this type can allow us to move forward. We have to look for alternative means to solve economic problems.”
Similar Situation in Kenya
The move of the Cuban government to fight its financial issues with the help of cryptocurrencies is not the only global example. As CryptoPotato previously reported, Kenya’s Central Bank explored the option of using Bitcoin to boost its depreciating Shilling.
The Kenyan local currency has been on a downward trend for the past few decades and has lost nearly 50% of its value compared to the US dollar since 2010. In the past year alone, the Shilling registered a decline of 10% against the greenback.
Consequently, the Central Bank of the African country came with a plan to switch its national currency to Bitcoin. Although such a move sounds utterly risky, as no government has done it so far, Central Bank Governor Patrick Njoroge revealed his confidence in the possible project:
”Our decision to shift to Bitcoin is both tactical and logical. Our currency has always been the punching bag for the IMF. This has led to too much pressure on the Kenyan Shilling, and this has a negative effect on the economy. Bitcoin will put an end to this.”
Shiba Inu (SHIB) Mania, Dogecoin, Tesla’s Bitcoin Halt and Crypto Market Volatility: The Weekly Recap
To say that last week was eventful would be an understatement. The entire market went through extreme volatility. Many altcoins charted new all-time highs and went through serious declines as well.
Let’s start with Bitcoin. The cryptocurrency is currently down about 10% on the weekly – last Friday, it was trading at around $57K. Unfortunately, it was all downhill from there, with the exception of the first few days as on Monday, BTC had an unsuccessful attempt at the coveted $60K mark.
On Thursday, Tesla announced that they would no longer support bitcoin payments for their vehicles, citing environmental concerns with BTC mining. This sent the entire market into a steep downturn, where the primary cryptocurrency crashed all the way to $45,700. Most altcoins followed.
Ethereum charted a fresh all-time high at around $4,400, but it was also affected by the downturn and crashed to $3,500 as a consequence. The same can be said for Binance Coin, Cardano, Ripple, and so forth.
Propelled by the sky-high increase in the price for DOGE, other cryptocurrencies with similar meme appeal, such as SHIB, Shiba Pup, Akita, and so forth, also took for the skies. Most of them shared one common trait – the developers had sent 50% of their total supply to the wallet of Vitalik Buterin as a “proof of burn.”
In a move that many didn’t see coming, however, Buterin started disposing of the billions worth of free money he had received. He donated large sums to charities in India, as well as to research facilities. This showed everyone that he doesn’t intend to keep these clone coins in a move that many considered a “rug.”
While a lot of these meme-inspired cryptocurrencies crashed and burned, some still brought massive gains to their investors. At the time of this writing, SHIB is up over 1500% over the past seven days.
All in all, it’s safe to say that it was a very exciting week in the cryptocurrency market. It’s interesting to see what the next week has in store.
Market Cap: 2369$B | 24H Vol: 245B | BTC Dominance: 40.5%
BTC: $51,336 (-10.27%) | ETH: $4,139 (+18.36%) | XRP: $1.42 (-13.12%)
This Week’s Headlines You Better Not Miss
Vitalik Buterin Sells Off Dogecoin Clones: SHIB, AKITA, and Others Face Massive Dump. In a move that shocked many, Vitalik Buterin sold a lot of the meme-inspired Dogecoin clones that he received. This sold most of them in a severe downturn, though a lot are still performing very well over a seven-day period.
Tesla Stops Accepting Bitcoin: Price Slumps $3,000 In Response. The giant electric vehicle manufacturer, Tesla, has decided to halt payments using BTC for its cars. The company cited environmental concerns as the primary reason for the decision and stated that it would continue to hold bitcoin on its balance sheet.
MoneyGram to Enable Users to Buy Bitcoin and Withdraw it From Brick-and-Mortar Locations. One of the world’s leading money transfer companies, MoneyGram, will allow its users to buy and withdraw cryptocurrency for cash at traditional brick-and-mortar locations in the United States.
US Investment Bank Cowen to Offer Crypto Custody Services. More banks are getting involved in cryptocurrencies. Cowen Inc., a large multinational investment bank based in the US, announced plans to hold digital assets for hedge funds and asset managers.
Crypto Is the Solution to the Problem Created By the Federal Reserve: Stan Druckenmiller. Stan Druckenmiller thinks that the US Dollar could lose its status as the global reserve currency. This is because of the ongoing policy of the US Federal Reserve. He also believes that a ledger-based system can be the replacement.
eBay Now Allows the Sale of NFTs on its Platform. One of the leading online marketplaces, eBay, has become the first in its industry to jump aboard the non-fungible tokens (NFTs) bandwagon, as the company now allows the sale of NFTs on its platform.
This week we have a chart analysis of Bitcoin, Ethereum, Ripple, Cardano, and Uniswap – click here for the full price analysis.
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Cryptocurrency charts by TradingView.
AllianceBlock Announces Decentralized Capital Market on Edgeware with Defi-NFT Approach
[PR – Utrecht, The Netherlands, May 14, 2021]
AllianceBlock has announced it will launch a decentralized capital market on the Edgeware smart contract platform. The protocol brings unprecedented tooling to the Substrate-based Wasm contract palette, including NFT contract standards, Defi and DAO primitives to their peer-to-peer market, further empowering collectives and individuals to lend and fund across the network.
In the longer term, AllianceBlock is positioned to bridge traditional finance and defi through globally compliant platforms and tools – interoperating with the latest in digital organization and governance and their team’s background across both financial paradigms, including CEO Rachid Ajaja, previously at Barclays and the VINCI smart cities project:
Edgeware’s vision of building a community owned, decentralized platform with a focus on on-chain governance is perfectly in line with our own. We are seeking to build a new financial infrastructure that takes advantage of innovative technology, and Edgeware’s community treasury, facilities for DAOs, and bridging of digital and physical entities are important parts of linking DeFi with traditional finance.
We are excited to be integrating our products into Edgeware, and look forward to collaborating more moving forward.
Edgeware is currently the oldest and few of the mainnet Polkadot ecosystem smart contract platforms, enabling teams like AllianceBlock to fully test and deploy on variety of development and mainnet Substrate chains.The value alignment and technical foundation, including the opportunity to model best practices off the chain’s own governance, has made deployment on Edgeware a quick and effective launch.
Look forward to a launch AMA in the Edgeware and AllianceBlock community forums in the next few weeks.
AllianceBlock is creating a protocol that will bridge DeFi and traditional finance (TradFi) to bring the benefits of both areas to one another and create the first decentralized capital market.
The AllianceBlock Protocol is designed to reflect how traditional finance would be built today with current technology. It incorporates new technology such as DeFi in a TradFi friendly manner, ultimately allowing us to facilitate services required by both spaces.
Long term, the decentralized blockchain-agnostic Layer 2 AllianceBlock Protocol will provide a secure and regulatory compliant gateway for billions of dollars present in TradFi to flow towards DeFi and enable DeFi platforms and protocols to be used by a much greater audience. In doing so, we will unlock DeFi for the world.
Edgeware is a community-owned, fairly distributed, self-sustainable blockchain ecosystem built on Substrate with on-chain governance and a collectively managed treasury, enabling users to fund the chain’s development and teams to build projects.
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