During the World Economic Forum in #Davos, the Minister of Finance and Economic Planning Patrick Chinamasa was asked if he’d buy Bitcoin at all. Well, his response was quite… interesting.
Watch the video below by Business Weekly. If for some reason, you can’t, worry nay, I’ve quoted his response in this article as well.
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So, his response to the question “would you buy Bitcoin?” was:
No, no, no that is out of the question. That is still very much of an academic issue. let’s always situate ourselves in our own reality and our own reality is as we speak we don’t even have our own currency. Now to talk about cryptocurrencies, Bitcoin which as you know has not even received the blessing of the IMF.
And as you know cryptocurrency, Bitcoin are something in the terrestrial realm and not something that you can touch. So I think it’s still out of the way for us at the moment. Let’s focus and see how we can get to the position when we have our own currency and we have already again and again spelt between ourselves and The Reserve Bank that we must address of a macroeconomic fundamentals.
We must build Reserves, we must address the issue of the fiscal deficit, we must address the issue of the trade deficit, we must also address the issue of the current account deficit. We need more investments. We must address the issue of production and so on. When all those are done and and we are comfortable that there is trust and confidence in the growth of the economy, then we can start talking about our own local currency and I would not want to be distracted by talking about very as of now for us in Zimbabwe utopian discussions on Bitcoin and cryptocurrencies.
Well, there’s a lot to take home from what he said but generally, what I get from the response is a “forget about Bitcoin we have more pressing matters at hand”.
The problem with such a stance is it shuns away the possibility of the government even considering this as a solution. Maybe the word solution there is a bit too ambitious, but I’m personally convinced that Bitcoin has the potential to alleviate us from these harsh conditions presented by the economic crisis we’re in.
No doubt that we have a cash crisis; a serious shortage of both the valuable forex as well as our not-so-valuable bond notes….but guess what? This is where Bitcoin (or cryptos in general) come in.
From the top of my head, here are some of the ways in which Bitcoin has helped so far in Zimbabwe. The use of Bitcoin has enabled people to have access to more affordable remittance services such as Bitmari and Study263. Also, Bitcoin has made the hustle of making international payments slightly easier.
So to say cryptos are far-fetched in Zimbabwe is actually far-fetched. Bitcoin can be or rather is relevant in Zimbabwe, we just need to figure out how to best leverage it while we build our economy and secure our own currency. I don’t dispute that cryptos may (key word: may) be a bubble, but the thing is we cannot totally stay away without even considering them. Disruptive technology is like that, it never ‘feels’ a 100% safe. So if we’re to move with it as the government has professed to do in future, then we need to be ready to look into innovations as they come, otherwise we’ll miss out on more than we can imagine.
Nonetheless, in essence, instead of just waiting for “IMF to approve”, we need to do a thorough research of our own. After all, unlike most countries in the IMF, we have much more pressing matters than they and therefore can’t afford to slack on the issue.
10 thoughts on “Minister of Finance Patrick Chinamasa Speaks on Bitcoin, Calls It Utopian.”
It seems the leadership of Zimbabwe does not want to accept that We Zimbabweans have got money in Zimbabwean Banks that we are unable to access. We are not asking for Donations from the Government, All that we want is to have access to using our money that is with the banks. We have accepted that the Government is currently very Broke but we are not Broke. The inability by those in power to come up with liquidity solution is costing us a lot of money. Now most people in Zim are forced to buy money – yes to buy money – eg to Cash up at some outlets can cost one up to 20% . You want to cash out $100 you get tiven $80 but get an sms that you have cashed out $100, with Cryptos this can be eliminated as one can not take more or less than they are given.
The Venezuela govt launching the petro coin comes to mind, zimbabwe could launch a mineral backed digital currency to raise capital unconventionally
Well, that coin is backed by something! Mineral backed! That’s better than fiat by so much! Bitcoin is backed by nothing! It’s almost like a fiat! It’s backed by enthusiasm and speculation, LOL!
That kind of coin (the Venezuela petro coin) is better in my opinion. However the government can sell bonds to raise money as well.
But the coin concept is indeed interesting!
We do not even have the appropriate infrastructure to handle Point of Sale properly and efficiently and yet you proposing the incorporation of Bitcoin as a store of Value for the nation just because its disruptive. With limited to almost no online purchasing (Debit card) being allowed in the country and a hyper inflated rate for bitcoin how do you suppose people will buy it except for those elite few. Lastly Just like 2007 were we had no control over our money as civilians, we have no control over Bitcoin therefore yes it will bust and place more people and businesses into a deeper whole all for the sake of disruption. I get what you saying but now isn’t the time to propose getting into a gun fight with a knife
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I’m not one to always agree with the government all the time, especially where the issues are on not adapting some new technology.
However, in this case, I’m going to have to go with the FM here. Let’s not lie to ourselves Ladies and Gentleman, Bitcoin, is indeed, as of this moment, for us, Zimbabweans, a utopian concept.
I get it, the tech is novel and indeed disruptive. However, with the volatility it has for now, the masses are more interested in the money they can get out of the volatility of the crypto currency and not on the use of the crypto currency as a means of transference of value, of which I thought that’s what it was created for.
Let’s not forget, Bitcoin requires infrastructure for it’s use, particularly, the internet, if I’m not mistaken. I’m quite sure that our internet access penetration in the country, isn’t quite as reliable. Ok, the connectivity, it’s really bad mostly. Let’s not forget the delays that we hear at times with the exchanges and the ever increasing transaction fees! It is indeed quite a ‘utopian’ concept that we can’t for now afford.
Also, with the volatility that is there with these cryptos, it’s quite a gamble to invest in it as a government! When a gamble is involved, you need to use money you don’t need! Like said above, our government is quite broke. That’s money we don’t have and cannot afford to lose as a people if this gamble goes the other way. I’m sure you’re quite aware of the massive slump in the value of Bitcoin early this year. We can’t afford to hold on to the currency and expect it to go up to a good price to use it as we’d like!
Furthermore, the price of Bitcoin in Zimbabwe, like mentioned in a comment above, is highly inflated. It’s near daylight robbery. It’s not ideal. It’s almost the same as being sold money or cashing out more than you receive.
Ok, so it’s true, Bitcoin and the fiat currencies we have are quite different. But they have a similarity in fiat currencies when they’re in digital form, they all will be in virtual form. If there is a great challenge in convincing retailers to accept electronic money in form of mobile money and point of sale, how are we to convince them also of another virtual currency that they cannot hold! Though there is an argument of reduction in transaction fees when using crypto since there is no ‘middle-man’, like mentioned above, the transaction fees for Bitcoin are increasing to a point where it only becomes practical only when making big purchases! Perhaps we can hope of using other cryptos, that are still easier to mine and less traffic thus having less waiting periods. But there’s that issue of infrastructure, there are places where there isn’t adequate internet access.
Lastly, FM is a government official. Government. These guys are there for regulation of things that happen in the country. What is Bitcoin? An unregulated virtual currency. That’s Bitcoin’s thing, being unregulated. So we can’t really think that the government, the regulators, will full on accept something known for being unregulated! For people whose purpose is to control things, they can’t control it!
Listen, I get it, Bitcoin, it’s new, it’s hip, it’s happening! But that doesn’t remove these concerns and more. Recently there was that huge Japanese Bitcoin Exchange hack, bigger than the previous Mt Gox hack. More than $500 million worth of crypto stolen! Of course this can be prevented by have offline wallets, but that’s another issue, they’re not as easy to grasp as a concept! It’s a gamble, if something were to happen to it, being unregulated, the government can’t do anything to recover people’s money. The Deposit Protection Scheme, can’t do anything about it.
Yes we have a money crisis. But locally, what Bitcoin can do for us, RTGS money can. Perhaps maybe we can debate the benefits internationally, but better alternatives might be alt coins and other cryptos like ripple.
As of now, Bitcoin is as the minister said, a ‘utopian’ concept, even the first world hasn’t reached!
Bitcoin isn’t “UTOPIAN” at all. Plenty of Zimbabweans are actually using Bitcoin to transfer funds to friends and families across boarders as remit funds. Others are using Bitcoin to pay school fees for their kids studying abroad. Others are using bitcoins to buy cars from japan using bitcoin. And all this is happening here in Zimbabwe. One doesnt need to have an expensive internet connection to use bitcoin, a $1 internet bundles will suffice. So i disagree with Chinamasa’s point of view.
You seem to have touched mainly on internet bundles alone of which if truth be told many in Zim cannot afford that $1.Can you also argue on the points raised by Anonymous_Too above which i think are very valid. Just to mention a few.
1.The exorbitant price of bitcoin in Zim.
2.The transaction costs.
3.The volatility of bitcoin
4.Bitcoin being an unregulated virtual currency
There’s no doubt the techzim writers have invested heavily in bitcoin… Buy the truth is it has no intrinsic value beyond speculation…. The truth is and I can’t believe I’m saying this but the minister is spot on… Why don’t we focus on farming.. Tech companies etc
Bitcoin has short just like any speculative gain be it in a casino or raffle etc but we cannot afford to base policy on winning chances at a casino. Let those that win enjoy but a government cannot depend on such.
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