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Zimbabwe Issuing a new Currency known as Bond Notes that are officially equal to US Dollar

The Reserve Bank of Zimbabwe says the new currency will, among other things, increase the country’s exports

Holding bills of new Zimbabwean money, a man welcomes the introduction of 'bond notes' saying the move will ease cash shortages in the country, in Harare, Zimbabwe, Nov. 28, 2016. (S. Mhofu/VOA)

Zimbabwe is issuing a new currency, known as bond notes, that officially are equal to the U.S. dollar. The government has gone ahead with the plan despite warnings the new currency will fuel hyperinflation and worsen the already ailing economy.

On Monday, there were still long queues at most ATMs in Harare, despite the release of the new bond notes, which are intended, in part, to ease long-running cash shortages.

The Reserve Bank of Zimbabwe says the new currency will, among other things, increase the country’s exports.

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But economist Prosper Chitambara, of the Labor and Economic Development Research Institute of Zimbabwe, says the bond notes will worsen the country’s situation.

“The costs may probably outweigh the intended benefits. Most of the economic agents in Zimbabwe have to buy imports from outside our borders. So they would require either U.S. dollars or South African dollars, or other internationally tradable currencies to be able to do business. Actually the bond note has even exacerbated the macroeconomic sustainability. It has eroded confidence within the financial system. It has created a lot of uncertainties in the market. Investors are not going to be interested in doing business in Zimbabwe,” Chitambara said.

A till operator poses with new bond notes at a supermarket in Harare, Nov. 28, 2016, VOA
A till operator poses with new bond notes at a supermarket in Harare, Nov. 28, 2016, VOA

Zimbabwe’s economy has been struggling for nearly a generation now, since President Robert Mugabe’s government embarked on a controversial land reform program in 2000 which displaced white commercial farmers off their land without compensation.

That affected the country’s backbone, agriculture. What followed were hyperinflation and shortages of almost all goods.

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In 2009, Zimbabwe abandoned its own worthless currency and it has been using all major foreign currencies, but mostly the U.S. dollar.

Now it has introduced bond notes, despite calls to abandon the plan as it might cause the economy to take a nosedive. That advice fell on deaf ears. (VOA)

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Bitcoin Worth Millions Stolen Days Before US Exchange Opens

Bitcoins worth millions stolen, re-think before you invest in cryptocurrency!

FILE - A bitcoin logo is displayed at the Inside Bitcoins conference and trade show in New York.

A bitcoin mining company in Slovenia has been hacked for the possible theft of tens of millions of dollars, just days before the virtual currency, which hit a record above $15,000 on Thursday, is due to start trading on major U.S. exchanges.

NiceHash, a company that mines bitcoins on behalf of customers, said it is investigating a security breach and will stop operating for 24 hours while it verifies how many bitcoins were taken.

Research company Coindesk said that a wallet address referred to by NiceHash users indicates that about 4,700 bitcoins had been stolen. At Thursday’s record price of about $15,000, that puts the value at over $70 million.

There was no immediate response from NiceHash to an emailed request for more details.

“The incident has been reported to the relevant authorities and law enforcement and we are cooperating with them as a matter of urgency,” it said. The statement urged users to change their online passwords.

Slovenian police are investigating the case together with authorities in other states, spokesman Bostjan Lindav said, without providing details.

The hack will put a spotlight on the security of bitcoin just as the trading community prepares for the currency to start trading on two established U.S. exchanges. Futures for bitcoin will start trading on the Chicago Board Options Exchange on Sunday evening and on crosstown rival CME Group’s platforms later in the month.

That has increased the sense among some investors that bitcoin is gaining in mainstream legitimacy after several countries, like China, tried to stifle the virtual currency.

As a result, the price of bitcoin has jumped in the past year, particularly so in recent weeks. On Thursday it surged to over $15,000, up $1,300 in less than a day, according to Coindesk. At the start of the year, one bitcoin was worth less than $1,000.

Bitcoin is the world’s most popular virtual currency. Such currencies are not tied to a bank or government and allow users to spend money anonymously. They are basically lines of computer code that are digitally signed each time they are traded.

A debate is raging on the merits of such currencies. Some say they serve merely to facilitate money laundering and illicit, anonymous payments. Others say they can be helpful methods of payment, such as in crisis situations where national currencies have collapsed.

Miners of bitcoins and other virtual currencies help keep the systems honest by having their computers keep a global running tally of transactions. That prevents cheaters from spending the same digital coin twice.

Online security is a vital concern for such dealings.

In Japan, following the failure of a bitcoin exchange called Mt. Gox, new laws were enacted to regulate bitcoin and other virtual currencies. Mt. Gox shut down in February 2014, saying it lost about 850,000 bitcoins, possibly to hackers.

Ali Zerdin in Ljubljana, Slovenia, and Carlo Piovano in London contributes to this story.(VOA)