Paper money is not enough, Bitcoin may help Zimbabwe solve hyperinflation

On November 15, 2016, the price of Bitcoin rose strongly and the market became mature and stable.

According to the price quotes on China's bitcoin trading platform, today's bitcoin/RMB opened at 4846.63, and was briefly pushed down to around 4811 within an hour after opening, but soon the market went up again, and the price of the currency rose strongly. As of 16:30 on the 15th, today's bitcoin/RMB highest price was 4950 and the lowest price was 4811.91.

As paper money fails to deliver the necessary support leading to hyperinflation, renowned economist Philip Haslam suggests Zimbabwe use Bitcoin.

Like other countries, Zimbabwe has faced its own economic woes, with a shortage of its currency supply leading to a financial crisis. Since its early economic collapse, Zimbabwe’s economic recovery has been running on the U.S. dollar, and the scarcity of dollars has led economists to see Bitcoin as a solution to its current economic woes.

Philip Haslam, a well-known economist and author of When Money Destroys Nations, expressed the same idea. An African technology news website reported Philip's idea, saying that this is the first time that someone who has a deep understanding of the workings of a country's economy and has experienced hyperinflation has recommended people to use Bitcoin.

The article quotes Philip Haslam as saying: “If Zimbabwe establishes a private Bitcoin national currency, and if the market naturally adopts a Bitcoin type currency, there will be a lot of money flowing into Zimbabwe as other government currencies around the world become weak… Zimbabwe will quickly move from its current predicament to a stable cryptocurrency global banking center.”

His point stems from the maximum cap on the number of Bitcoins that can be mined and the impact this has on the price of the digital currency. If the country successfully replicates its own cryptocurrency as legal tender, it could end up having the most valuable currency in the world. However, Zimbabwe could always introduce the South African rand, but this is only a short-term solution as the economy could collapse again in the future.

Zimbabwe has been on the list of top 10 countries with the highest Bitcoin adoption rates, created by Garrick Hileman of the London School of Economics, since 2014. If the Zimbabwean government decides to adopt Bitcoin or a Bitcoin-type digital currency, it would certainly set a precedent for other countries that are considering similar issues, which could make Bitcoin a global currency.