Recent challenges in the country have prompted authorities to take a series of unpopular measures; citizens are increasingly turning to Bitcoin to work around them
The Reserve Bank of Zimbabwe (RBZ) has officially designated Zimswitch as the national payment switching service, according to a public notice issued last Thursday. All financial service providers in the country, including mobile money operators (MMOs), are now required to connect to this platform.
The move is presented as a step to improve interoperability among financial service providers.
Observers suggest the directive is aimed at Ecocash, the country’s largest MMO. In the past, Ecocash has been accused of obstructing efforts to enhance interoperability between MMOs, allegedly to preserve advantages tied to the existing system.
Critics say Ecocash may have undermined competitors to protect the dominant position it built after significant investments in Zimbabwe’s financial infrastructure.
A survey released by the Postal and Telecommunications Regulatory Authority of Zimbabwe found that Ecocash handles more than 94% of all mobile money transactions.
Supporting this finding, a study from the Reserve Bank of Zimbabwe shows that mobile money is the preferred method for domestic retail payments, accounting for roughly 80% of transactions in that category.
Government intervention
For several years, Ecocash’s dominance has been a point of friction with regulators and, increasingly, with the government.
Recently, authorities issued a directive to suspend certain mobile money transactions. Coupled with the country’s economic struggles and hyperinflation, this policy has heightened tensions across the political and financial landscape.
Ecocash resisted the suspension order, arguing that the government official who announced it did not consult the RBZ before going public. The dispute was resolved quickly after the RBZ issued a statement aligning with the government’s position.
As a result, many citizens have turned to Bitcoin—especially for cross-border payments. Bitcoin is often used because it can be transferred quickly and is not subject to the same domestic regulations that can restrict mobile money services.
Others are choosing to hold savings in Bitcoin to maintain control over their funds. Government attempts to suspend or exert control over Ecocash cannot be replicated with Bitcoin, and the cryptocurrency is not directly affected by local inflation in the same way fiat balances are.
Workers sending remittances have also increasingly relied on Bitcoin to move money to their home countries.
Although the RBZ has instructed banks to cease supporting activities related to cryptocurrencies, Bitcoin trading and payment transactions continue to take place across the country.