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Zimbabwe Suspends Mobile Money, Stock Exchange as Currency Collapses

[PHOTO/ COURTESY]

The Zimbabwe government has suspended all mobile money payments, including operations of the dominant provider Ecocash, and ordered the Zimbabwe Stock exchange to stop trading, in response to country’s current economic crisis.

The government claims the move is to avert a conspiracy to sabotage the collapsing Zimbabwe dollar.

However, millions of Zimbabweans rely on Ecocash and other digital payment operations due to the difficulties associated with obtaining physical cash.

Ecocash also responded vowing to defy the ban and maintained that only the Zimbabwe Central Bank can order it to stop trading.

The Zimdollar was reintroduced in 2019, replacing a variety of currencies that were in use in the country such as the Japanese Yen, the US Dollar and Pound Sterling. In efforts to strengthen the Zimdollar, the government banned the domestic use of all foreign currencies.

However, the government has been marred in corruptions scandals and this has seen the country quickly lose ground to the US Dollar, making it the fifth time in Zimbabwe’s history for the national currency to collapse.

Read: CBK Directive For Free Mobile Money Transactions Faces Backlash

Meanwhile, the local stock market has surged as investors search for safe havens and inflation has risen above 750 percent.

Most Zimbabweans have turned to digital payments and a 2019 report form the country’s Central Bank showed that they accounted for 85 percent of all transaction volumes and 22.6 percent of value.

According to the government, the stock exchange and mobile money operators are either deliberately or inadvertently acting to sabotage the economy and are responsible for the Zimdollar’s volatile black market exchange rate.

Meanwhile, African Crypto News Outlet Bicoinke has reported that “The demand for Bitcoin has skyrocketed” after the suspension. The cryptocurrency is said to be selling at 18 percent above the market rate. Ecocash is commonly used to buy Bitcoin and has denied any wrongdoing.

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Written by Vanessa Murrey

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