Rand is In Peril For South Africans, and Flashback To History

Many South Africans are currently feeling the results of a pinch as their own currency, the Rand, is sinking. As luck would have it, many South Africans have an alternative to their own sinking currency in Bitcoin. It has already been used to pay for electricity at a local school. Many South Africans are taking another look at Bitcoin since rising inflation hurts savers. They have many reasons to be wary, chiefly which is the example of their neighbor Zimbabwe.

Concerns Over Country’s Treasury Leadership Amount

This decline in the value of the South African Rand is a result of concerns over the integrity of one of the country’s Finance Ministers, Pravin Gordhan. There are concerns that Pravin has abused his office. What is really at stake in the trial is that Gordhan represents the control over the country’s national treasury. However, Gordhan has also suggested that the charges against him have been a result of political motivations. Decisions of who will control the treasury are certainly enough to spook currency markets. This means that some of the most basic items will become more expensive for South Africans – Food, Cars, Shoes, Clothes and especially items which have to be imported. This is a punishment for savers whom rely on having a stable currency.

Venezuela Feeling Effects of Hyperinflation

The oil market crash hit Venezuela hard: ordinary Venezuelans have no way of being able to survive. Store shelves are empty and the country simply isn’t able to obtain as much money as they were able to do so in the past for their oil exports. The oil fields used to be a path to a decent living and the uniform of the oil worker was once a coveted item. Now, the uniform of the oil worker is exchanged for food at a major loss from it’s former value.

Bitcoin Is An Alternative

The situation in Venezuela is so bad that people have already been forced to use Bitcoin as a means of being able to purchase ordinary items. Many ordinary Venezuelans rely on remittances from abroad to stay afloat economically in these challenging times. Thus, these individuals whom are forced to rely on remittances have found that it’s easier to receive these through Bitcoin. Bitcoin simply has attracted a huge community of individuals whom are interested in it.

Economic Uncertainty is a Reality

Even the British Pound has fallen sharply in value as a result of the Brexit decision. Because Bitcoin cannot be controlled by any single central government, the currency offers an excellent hedge against any forms of hyperinflation which can be all too damaging to a saver’s bottom line.