Zimbabwe’s minister of information publicly dismissed ongoing rumors about the country considering the adoption of cryptocurrencies and Bitcoin. Rather, Minister Monica Mutsvangwa clarified that the Government of Zimbabwe is keen to experiment with a central banking digital currency (CBDC). Earlier, the South American country El Salvador had become the first country in the world to adopt bitcoin as an optional legal tender along with the US dollar.
Zimbabwe is planning on a national digital currency.
The rumor about Zimbabwe’s crypto adoption was sparked based on numerous reports quoting Charles Wekwete, permanent secretary of the president’s office, saying that the government was in talks with private sector businesses to help introduce cryptocurrency in the country. Just one day after the reports, Mutsvangwa took to a cabinet briefing to dismiss the ongoing crypto adoption claims, saying, “Government would like to assure the nation that it is not considering introducing another currency in the economy as reported in some sections of the media. Our local currency is the Zimbabwe dollar (ZW$) and not cryptocurrency.”
The government is following in the footsteps of other countries by studying CBDCs.
The minister clarified that the government of Zimbabwe is following the footsteps of other countries by studying “CBDC as opposed to cryptocurrencies, bitcoins or any form of derivatives.” It is important to note that CBDCs are digital tokens issued by a government’s central bank. If launched in Zimbabwe, the digital tokens will be pegged with the Zimbabwe dollar and will have the monetary value of the local currency in real-time.
Central banks around the world are experimenting with retail and wholesale CBDCs to find cheaper cross-border payment alternatives while increasing their ability to track transactions to deter money laundering and other fraudulent activities.