Zimbabwe will opt for a central bank digital currency to complement the volatile Zimdollar rather than go the cryptocurrency route – despite officials having made announcements to the contrary.

Earlier in the week Charles Wekwete, head of e-government technology, said the government is consulting on the adoption of cryptocurrencies as a mechanism to ease payments and currency woes.

However soon after the government released post-cabinet meeting statement which read: “Our local currency is the Zimbabwe dollar (ZW$) and not cryptocurrency.”

The Zimdollar has continued to lose value on official and parallel currency markets in Zimbabwe and cryptocurrencies had been viewed as a stabilising factor in terms of store of value.

Cryptocurrencies such as bitcoin and Stablecoins have increased in popularity within the Southern African country where they are used to circumvent challenges in remitting funds and in storing value owing to cash shortages and local currency volatility.

“Government would like to assure the nation that it is not considering introducing another currency in the economy as reported in some sections of the media,” the official statement continued.

It added that Zimbabwe was, like most countries in the world, “studying Central Banking Digital Currency (CBDC) as opposed to cryptocurrencies, bitcoins or any form of derivatives”.

This despite a senior government official saying Zimbabwe was now “trying to understand their (cryptocurrencies) implication because they are a fundamental departure from previously known financial instruments.”

Nigeria has launched a digital currency in the form of the e-Naira and South Africa has also officially embraced cryptocurrencies which are now taxed in addition to opening a regulatory sandbox that allows for cryptocurrency remittances to countries such as Ghana.