Zimbabwe is in dilemma on the adoption of Bitcoin?

There were widespread rumors spread that The Zimbabwean government is going to consider the adoption of cryptocurrencies or Bitcoin. Within 24 hours, Zimbabwe’s minister of information publicly dismissed ongoing rumors about the country considering the adoption of cryptocurrencies and Bitcoin (BTC). Crypto usage in the South African continent has drastically increased by 1,200% for the period between July 2020 and June 2021. That gave a lot of pressure on Zimbabwe whether to go with digital currency or not. Just like other nations Zimbabwe also have common suspicions on the adoption of cryptocurrency like the cross-border movement of funds, money laundering, externalization of funds, and illicit flow of funds to fund illicit issues. That made the government reverse the decision. To some extent, it is appreciable that Zimbabwe is keen to experiment with a central banking digital currency (CBDC).

What is CBDC? How does it differ from Crypto?

Central Bank Digital Currency is a virtual form of fiat currency which is a government-issued currency. A CBDC is an electronic record or digital token of a country's official currency. CBDC came into the picture when governments are still in dilemma in the adoption of cryptocurrency in their nations. The main aim of CBDC is to take away people from the usage of paper currency and take them towards digitalization. Those governments whose unable to legalize Bitcoin are looking towards CDBC. European Central Bank, a central bank of the European Union seriously wants to release digital Euro. The digital euro is a central bank digital currency (CBDC). This is digital money issued by a central bank to the general public. Indian Central Bank, RBI recently said that it is working towards a ‘phased’ launch of a CBDC.

CBDCs have a centralized network operated by the central bank of the nation whose blockchain technology can be accessed. Cryptocurrencies whose main feature is decentralized network can access by anyone in the blockchain. No centralized authority is capable of limiting their use.

CBDCs use on private blockchain whereas cryptos are running in a public blockchain. CBDC customers will have their identity with an existing bank account but users in cryptocurrency should enjoy anonymity. CBDCs are replicas of cryptocurrencies but have some restrictions and limitations.

Bitcoin, the world's popular cryptocurrency, hit a record-high $68,000 last month after taking another step towards mainstream status. The market cap of cryptocurrencies is worth more than $3 trillion for the first time. The value of $3 trillion includes the prices of more than 10k cryptocurrencies. Apple CEO Tim Cook has expressed his interest in Bitcoin and revealed owning of bitcoin. There are no stoppings for the increasing popularity of cryptocurrencies in the world.