As Zimbabwe’s currency crisis continue to escalate, the government announced to suspend all mobile payments, including operations by dominant provider Ecocash. In a historic decision, the government also ordered the Zimbabwe Stock Exchange to stop trading. The government claims that the decision is taken to avert a conspiracy to sabotage the collapsing Zimbabwe dollar. Millions of Zimbabweans rely on digital payment operators because obtaining physical cash is so difficult. Ecocash is also used to buy cryptocurrency like Bitcoin in the country.
Ecocash continues to operate despite the government’s directive.
Ecocash put out a statement on Twitter saying that they are aware of the statement issued by the Secretary for Information and Publicity and Broadcasting Services that bans all mobile transactions. The company noted that they are regulated by the country’s central bank and will only if they receive such notice from the central bank. The platform assured all of its users to continue to use the platform until they notify them further. The inflation has risen above 750% in Zimbabwe, and the local stock market has surged, as investors have sought safe havens.
Dear Valued Customer,
— EcoCash Zimbabwe (@EcoCashZW) June 26, 2020
Demand for Bitcoin spikes in Zimbabwe.
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 pound sterling. Zimbabwe has previously also suffered from hyperinflation in the past. The African crypto news outlet Bitcoinke claims, “the demand for Bitcoin has skyrocketed” in the wake of the mobile payment suspension. The news report claims that the cryptocurrency is selling at 18% above the market rate. Amid the hyperinflation and the pandemic, millions of Zimbabweans have turned to digital payments. Mobile wallets accounted for almost 85% of all transaction volumes in 2019, and 22.6% of the value, according to the country’s central bank.