Zimbabwe’s currency collapse in 2008 and record hyperinflation are widely seen as textbook examples of what could go wrong with a centralized currency. For example, some cryptocurrency enthusiasts – as well as opponents of the Fiat currency system in general – have regularly pointed to the fall of the Gimdolar while arguing for an alternative currency system.
In other cases, like the entrepreneurs behind Zimbocash, a decentralized currency and payment platform for all Zimbabweans, has already introduced such an option. They hope that this alternative to the Fiat currency issued by the central bank will show the money that enables people to save.
To learn more about this Zimbocash system, Bitcoin.com reached out to Lasvet Savadoy, head of the News Subscriber Network. Below is a polite answer to a question sent to him via WhatsApp.
Bitcoin.com News (BCN): Can you start with the idea you came up with?
Laswet Savadye (LS): We have become passionate about sound money. Many of the team faced the pain of Zimbabwe’s first hyperinflation and money printing and that was when it was further strengthened with the book Money Destroyed Nations. We are interested in solving the problem of money printing with Sound Money. This is the only way to create sustainable savings, trade and wealth creation on a national scale.
BCN: As you know, what do you expect to achieve through Zimbocash cryptocurrency or Jash?
LS: Our larger goal is to establish good money for Zimbabwe – we have created money that is stable in supply but available to all Zimbabweans. Zimbabwe has a very weak currency and banking system, suffering from hyperinflation and economic instability. We want to see Zimbabwe’s economy transformed by money.
The goal is to restore confidence in the money and banking system. The Zimbocash system is based on a decentralized blockchain – a revolutionary technology that enables a certain supply of money and a reliable payment system.
BCN: Your head of corporate communications, Philip Haslam, recently suggested that Zimbocash is the solution to Zimbabwe’s declining financial and banking system. Does this mean your cryptocurrency will compete with the local Fiat currency?
LS: Zimbacash is not competing with the local Fiat currency. We believe there is room for coexistence between the two. Zimbocash is not trying to replace the Fiat currency, but rather it is complemented by an alternative currency that people can use.
BCN: There are suggestions or complaints that you basically have two cryptocurrencies, one that was airdroped for Zimbabwean users and the other that is listed on the South Korean cryptocurrency exchange, Bithamb. How do you react to this?
LS: We do not have two cryptocurrencies. We have one and it is publicly available to everyone at Transcan https://tronscan.io/#/token/1002984. In order to be listed on the exchange, one has to install an exchange float which will be used for buying and selling to bring the reference price.
BCN: Still on the same issue, there seems to be some confusion about the status of the AirDrop Jash Token. For example, some holders of AirDrop tokens claim that they cannot be sold on Bithomb. Is that correct? If so, why aren’t you allowing AirDrop Jash token holders to trade these?
LS: As part of this, we need a market value and attract sufficient liquidity in our exchanges to enable border trade. Liquidity increases over time. It’s fragile. There are a few national airdrop systems that have failed because they did not take the time to build a direct payment network and each reduced the price by selling directly.
We need to work first to create a peer-to-peer trading network and as liquidity increases we can gradually open exchanges. Demand for this specialty has grown significantly as a result of recent corporate scandals. Also, as transactions increase, the international demand for an affordable money token that has a true peer-to-peer network will increase. As a result of these two, buying liquidity will increase and sales liquidity will decrease. Both of these forces will enable us to open up increasing exchange transfers.
For that reason, we will limit the amount that users can sell. We want users to make appropriate transactions and we will carefully monitor high value people who have a lot of cash আমরা we want it to be used in day-to-day trading.
That said, we’re happy to announce that we’ve opened up exchange transfers for users who make a maximum of ten transactions per month. This is a start, our goal is to gradually open up exchange transactions with increasing time, rewarding those who make the transaction.
BCN: Now, Zimbabwe’s finance minister, Mthuli Ncube, has recently made some positive comments about cryptocurrency. What is your opinion about what the minister said in NQB?
LS: The finance minister made a similar comment in 2018, when he said “Zimbabwe should invest to understand innovation and often central banks are too slow to invest in this technology.” We are in favor of the Finance Minister’s statement.
BCN: In your opinion, do these remarks of the Minister indicate that both the government and the central bank are now adopting cryptocurrency?
LS: That would be great. It is currently a new technology and no one else has successfully enabled a blockchain with a certain amount of funding for an entire nation, so, in many ways, it is an innovative technology. We believe that the government is taking the right approach, i.e. wait and see. As the market grows we believe that there will be appropriate participation and control from a point of greater understanding.
BCN: Many central banks in Africa are studying or preparing to introduce digital currency (CBDC). In your opinion, is the central bank able to issue a successful or effective CBDC?
LS: CBDCs do not use blockchain policy to fix money supply. All of these CBDCs will be linked to global CBDCs and will have global control over transactions. In a world where all transactions are digital and governments around the world will print massive amounts of money. At the moment it is a big global risk and our goal is to solve this problem by fixing the money supply using blockchain technology in Zimbabwe.
Everyone in Zimbabwe – government, business and the general public – should be able to rely on the economic system. Otherwise, the risk is that Zimbabwe will be trapped in the global central bank’s digital currency system that impoverishes the entire nation.
BCN: Do you see CBDC as the right solution to Zimbabwe’s currency problem?
LS: In many ways, the RTGS dollar is a form of a central bank’s digital currency. There are two key issues, what can be used to finance a CBDC where no one can increase funding, and a CBDC can be created that is ultimately not controlled by offshore power.
BCN: After all, you’ve been on the ground for a while. In your opinion, is Zimbabwe ready for digital currency?
LS: Zimbabweans are much more ready for digital currency. RTGS dollars were a much needed habit of people from using digital and current mobile wallets such as Ecocash and One rupee. We see a lot of excitement about the Zimbocash system and we believe we have the opportunity to establish something truly unique in the world.
What are your thoughts on this interview? Let us know what you think in the comments section below.
Image credit: Shutterstock, Pixabay, WikiCommons
Denial: This article is for informational purposes only. It is not a direct offer or request for a purchase or sale offer, nor is it a recommendation or approval of a product, service or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. The Company or the Author is not directly or indirectly responsible for any loss or damage caused by or in connection with the use or reliance on any content, product or service referred to in this article.