HRF’s Weekly Financial Freedom Report #28

DR Congo | Introduces New Controls to Curb Dollar Usage

The Central Bank of Congo introduced a new mandate requiring that all electronic payment terminals (EPTs) in the Democratic Republic of the Congo exclusively accept Congolese francs. Prior to this new mandate, the central bank also enacted measures requiring that all prices be stated in the local currency. Currently, only 13% of EPTs accept Congolese francs, with most accepting foreign currencies instead. This new measure coerces citizens into using the local currency, despite high inflation and the public’s strong preference for US dollars. By proactively enforcing the use of the franc, Congolese officials are undermining financial freedom by restricting citizens’ usage of more stable currencies. With an inflation rate of nearly 47%, Congolese citizens are naturally seeking stability and security in foreign currencies, making this mandate particularly restrictive to their financial autonomy.

Hong Kong | Bank Accounts of Pro-Democracy Protestors Closed

A recent Hong Kong Free Press article reveals that HSBC and other banks in Hong Kong closed the accounts of individuals jailed for their involvement in the 2019 pro-democracy protests. These closures significantly impact the financial freedom of former protesters, hindering their ability to reintegrate into society, access their funds, and secure employment. By freezing citizens’ bank accounts, banks are actively punishing dissent and suppressing freedom of expression. This aligns with the contentious national security law recently passed by the legislative council in Hong Kong, widely regarded as a tool to further curtail democratic freedoms and curb dissent. The account closures add another layer of repression, signaling a continued effort to marginalize those who oppose the government and further eroding civil liberties and financial freedoms in Hong Kong.

Zimbabwe | Regime Continues Freezing Bank Accounts

The Financial Intelligence Unit (FIU) of the Reserve Bank of Zimbabwe froze 522 bank accounts belonging to various individuals and companies. This measure aims to enforce its new ZiG currency and risks isolating citizens in an economy mired by repeated currency failures. The FIU is targeting those “manipulating” exchange rates through foreign currency trading in an attempt to remove the exit ramps from its new currency. By restricting financial activities and monitoring transactions, the FIU is severely curtailing the financial freedom of Zimbabweans. This action illustrates the regime’s extensive control over financial activity, making the deployment of a CBDC (currently under research) particularly alarming. Programmable money in the hands of an authoritarian regime like Zimbabwe would only serve to amplify these issues by handing direct control over transactions and accounts to the government.

Egypt | Cost of Bread Quadruples

Beginning June 1, the cost of a loaf of subsidized bread quadrupled in Egypt, pushing this staple food further out of reach for millions of Egyptians. With 60% of the population living at or below the poverty line, increased costs are pushing them to the brink. “We can’t handle any more [price increases],” said Egyptian citizen Gamal Ahmad, adding that “there’s still gas, electricity, and water bills. All prices are rising.” This price hike follows a significant currency devaluation in March, when Egypt floated its exchange rate to comply with IMF loan requirements. With inflation above 32% and debt payments consuming 62% of the government’s budget, citizens are bearing the burden of an economy in turmoil while the dictatorship gets a bailout and more credit for weapons, security, and surveillance services. As part of an effort to fight back, HRF recently made a grant to Building Bridges to Bitcoin. This Bitcoin educational initiative provides materials in Arabic to help youth secure financial autonomy and transform their region through sound and open-source money.

Vietnam | Arrests Prominent Facebook Users

Officials in Vietnam arrested two prominent Vietnamese Facebook users for allegedly “abusing democratic freedoms to infringe upon the interests of the state,” according to the government. Authorities apprehended ex-reporter Truong Huy San and lawyer Tran Dinh Trien as the regime continues escalating censorship of media and dissent. Both San and Trien were critical of the regime and law enforcement officials, who face international scrutiny for numerous human rights abuses. These actions illustrate the absolute suppression of free expression in Vietnam, where citizens cannot even engage in online discussions to criticize the government or advocate for their rights. Autocracies like Vietnam are mixing targeting individuals over their social media posts with targeting individuals over their transactions, attempting to close the doors on any dissent.