Zimbabwe Central Bank Governor Claims People Were Creating Own Money Using Blockchain
Zimbabwe’s central bank governor Dr John Panonetsa Mangudya, has incredibly claimed that Zimbabwean citizens were using the blockchain to create their own money.
Mangudya, who also declared that he does not believe “in these bitcoins,” made the astonishing claims during an interview with publisher Trevor Noah on his program In Conversation With Trevor.
The central bank governor claimed that Zimbabweans used the blockchain to create their own money through the mobile money network. Speaking to Trevor Ncube, Mangudya said,
Bitcoins or blockchain, like you said it. You see, it reminds some of what happened to mobile banking transactions in Zimbabwe. Whereby some people were just creating money from blockchain and creating money supply in the economy.
Last year, the Reserve Bank of Zimbabwe accused the country’s biggest mobile money company EcoCash of running an elaborate Ponzi scheme. The central bank alleged that EcoCash was devaluing the Zimbabwe Dollar by accelerating the black market exchange rate.
In court papers filed at the High Court, Mangudya claimed that EcoCash was creating fictitious money used to buy foreign currency and inflate the exchange rate. He further alleged that the mobile money company had agents who had massive illegal overdrafts on their Ecocash accounts, which was well in excess of ZWL$39 million.
Mangudya also said that the central bank authorities do not believe in bitcoin and cryptocurrencies. He added that the fiscal authorities were only interested in digital currencies issued, controlled and regulated by the central bank. Speaking on cryptocurrencies, Mangudya said,
As a central bank, we don’t believe in cryptocurrencies, we don’t believe in these bitcoins. We believe in central bank digital currencies.
The governor added,
For now, our prayer is that we work on a central bank digital currency before we go this other route of cryptocurrencies.
According to TechZim, the difference between cryptocurrencies and central bank digital currencies is as follows:
Both are ‘digital currencies’, but the main difference is that CBDCs are issued by a central authority which retains the power to issue as many such digital currencies as it wants. In comparison, cryptocurrencies like bitcoin do not have a central authority with unfettered power to issue coin.
The other difference is that cryptocurrencies utilise blockchain technology which central bank digital currencies could use but are free not to. One of the leaders in CBDCs is China which has a digital yuan in testing and it does not utilise blockchain technology at this moment. They are considering the distributed ledger but cite its scalability and performance limitations today.
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