Digital currency can be defined as digital money which is not tangible but can be used to sell and purchase goods, products, or services. Digital currencies are treated the same as any other fiat currency. The digital currencies need a centralized location for its regulation within a network for any financial transaction. Some of the popular types of digital currencies are bitcoin, litecoin, ripple, and dash, etc.
Digital currencies in Zimbabwe:
Zimbabwe has been facing a crucial time in economic terms for the last two decades. Digital currencies were gaining popularity and the bitcoin up app on the rise in 2009, Zimbabwe banned foreign currencies to be used within the country for local transactions. Even after all the popularity of digital currencies and all the applications such as block chain, block folio, digital currencies were not able to boost the monetary markets of the country.
During this period the country introduced its own digital currency known as “ZimboCash”. Zimbabwe is the first country to introduce its own digital currency. When the whole world thinks that bitcoin the best digital currency, Zimbabwe thought that bitcoin is not what they need. So, Zimbabwe ended up introducing its own digital currency which shows an open-minded approach of the Zimbabwean government and the public to adopt a new monetary system.
As the country was not left with a lot of money so the main focus after introducing zimbocash was to promote Zimbocash. When introducing Zimbabwe’s very own digital currency it was taken into consideration that the Zimbocash should be so easy to be used for financial transactions that people do not have to think before investing it. Thanks to these efforts the consumers of zimbocash did not have to buy any tokens which encourage the consumer to invest more in Zimbocash. The whole idea behind introducing a Zimbabwean digital currency was to encourage consumers to invest in Zimbocash. The country started a paid campaign for advertising zimbocash so people will prefer digital currencies over fiat currencies.
Challenges for digital currencies:
Digital currencies no doubt are serving well in Zimbabwe but there are some challenges faced by digital currencies are as follows:
People find the technology complicated at first and they are hesitant to use any applications. They take their time to get used to it. But now the software developers from all around the world have succeeded in developing several applications that make the use of digital currencies so easy that consumers are encouraged to use these applications to invest in digital currencies.
Loss of information:
When making financial transactions by using different platforms for digital currencies the consumers are afraid of losing their confidential information. Even people are afraid to share their financial credentials because such information has been copied and used for fraudulent activities in past. But the platforms made for digital currencies have solved this problem too by introducing the principle of scarcity to the digital sphere because in old times it was impossible to verify which data is real but now this feature has been added in these applications which detects if the data provided is a copy or original.
One of the major challenges for digital currencies is that the consumers doubt the safe and secure financial transactions as there is no trusted third party or intermediary party is involved. This absence of a third party makes the consumer think if the financial transactions will be carried out safely or not. But in the digital currency market, there is no need to be concerned about the person with whom you are interacting. All you need to check is whether the currency is original or not.
The challenges for digital currencies do not end here but different countries have different tough policies. As blockchain technology involves digital currencies which is equivalent to money so governments put some really tough regulations. The consumers who are performing financial transactions internationally have to take the license from different governments for their transactions.
After reviewing the positive aspects as well as the challenges faced by digital currencies we can definitely conclude that digital currencies have such a potential that the platforms developed for digital currencies are capable of facing all challenges. So it can be observed that the monetary market of Zimbabwe is really ripe of digital currencies and it can definitely be the future of the Zimbabwean economy and is completely ready to deliver to people of Zimbabwe