There are several examples of such attempts around the world, more or less successful.
Zash, the anti-inflation cryptocurrency in Zimbabwe
A case in point is Zash. It’s short for Zimbocash, a cryptocurrency that aims to become a popular means of payment in Zimbabwe, thus countering the hyperinflation the country has been experiencing for years.
Since 2015, the country has divested itself of the Zimbabwe dollar to use only the US dollar or the South African rand.
To illustrate how high inflation was, it suffices to know that 175 million Zimbabwean dollars were exchanged for 5 US dollars.
To counteract this imbalance, Zimbocash was born. It is a decentralized encryption based on the Tron blockchain. It has a fixed supply of 4.5 billion tokens. Your goal is to become a means of payment.
Users who register on the official platform receive tokens, which they can spend or sell (Zash is listed on Bithumb). However, the system aims to encourage its use as a means of transferring money away from the disastrous dynamics of Zimbabwe’s fiat currencies.
The dream of its promoters is to make Zash coexist with local currencies, becoming complementary to them.
Recently, the local economy minister, Mthuli Ncube, said he was in favor of using cryptocurrencies. In his opinion, they can be the solution to reduce the cost of shipping. However, nothing suggests that the government will opt for Zimbocash.
The case of Venezuela and the Petro experiment
Venezuela tried with Petro to fight its inflation. Not that he succeeded, but Maduro’s intuition certainly made it possible to use Petro instead of other cryptocurrencies. According to some surveys, Petro is better known and used than Bitcoin (In Venezuela).
While it is doubtful whether Petro is really supported by large amounts of oil (which is why the name), it appears that the cryptocurrency is gaining in popularity in Venezuela alongside the local currency, the bolivar.
El Salvador, where Bitcoin coexists with the dollar
If Venezuela chose its own cryptocurrency to spread among the population, El Salvador chose Bitcoin. Since September 7, the BTC coexists as a means of payment with the US dollar (El Salvador no longer has its own currency, which was also killed by hyperinflation years ago).
President Bukele’s choice was dictated by the need to find a system to strengthen his fragile economy. With the introduction of Bitcoin, the president estimates he will save his fellow citizens up to $400 million in commission costs per year incurred when making remittances. For a country of 6.4 million inhabitants, this is no small feat.
Cryptocurrencies and inflation: final considerations
Bitcoin and cryptocurrencies are proving to be an alternative system to inflation and useful in improving economic conditions. The cases of El Salvador and Venezuela prove this.
However, there is still a lot of skepticism to overcome. Strong states, instead of allowing the spread of cryptocurrency, are working on their own digital currencies (CBDCs). The weaker ones are more open to cryptocurrencies, although they look for a way to control them, disregarding their decentralized nature.
What emerges is a real ongoing challenge that could change the way money is perceived.