Following the removal of Robert Mugabwe from office towards the end of 2017, the sense of optimism for the future in Zimbabwe has the potential to lead to many avenues of investment and commerce. At present, the country’s economy is in steep decline, and the currency is collapsing. Unlike Venezuela, in a similar position, and with the intention to set up their own cryptocurrency, Zimbabwe’s KuvaCash has formed a partnership with Dash which could help to solve the country’s financial problems.
What is KuvaCash?
KuvaCash is cryptocurrency simplified, if you like. Available to anyone with a phone-number based messaging system, the peer-to-peer system works in much the same way as other cryptocurrencies, and will help users not only avoid but prevent inflation; digital currencies are not subject to the same issues as national currencies. One major advantage is that it will help ordinary people hold onto their savings whilst the economy recovers.
Why is Dash doing this?
Ryan Taylor, the CEO of Dash sees the potential of cryptocurrency as a fix for economic crises. At present, Zimbabwean locals have no option but to wait for hours in bank queues to get to their own money, and are then slapped with huge fees for each transaction. The government tried to apply the fix of issuing bonds to match the US dollar price, but this was only a temporary measure. The Dash fix has the potential to be a longer-term solution. As Taylor states: “I have been advocating for quite some time the potential benefits Dash can provide to economies with less stable currencies, and Zimbabwe seems a prime location for these benefits.” As Dash has researched the market well, he is particularly confident of success.
When will this take place?
KuvaCash will roll the model out starting in the second quarter of 2018, so at the time of writing, in a little over three months. It will be designed to instil confidence in users, and will allow them to cash out into US dollars at any time they choose. They’ll avoid huge bank fees which will eat into their savings, and be able to keep more of their money.
US dollars are already informally in circulation in Zimbabwe, but not by banks; in fact, there’s something of a thriving market in ‘money laundering’, but not by the means you might expect! The bills are so dirty without physical financial institution management that some users are washing them clean, and selling them at anything up to a 20% markup. KuvaCash is a digital solution which will enable people to purchase goods and services without huge transaction fees (and save them money in soap powder).
Although the project doesn’t yet have a money exchange and remittance license, there is little doubt that this will be granted. The Dash/KuvaCash partnership is likely to receive both government and reserve bank backing, and will hopefully help to take Zimbabwe on to what has the potential to be a bright economic future.