As the political turmoil in Zimbabwe has increased, so has the price of bitcoin.

This week, at the same time military leaders were placing longtime president Robert Mugabe under house arrest, rising demand pushed the cost of one bitcoin in the African nation to $13,000 U.S. That's double the international rate, CNN Money reports

According to Bloomberg, bitcoin and other digital currencies are becoming more popular in countries like Zimbabwe as people lose faith in their local currency and financial institutions amid political and economic upheaval.

"Bitcoin is a safe haven for people around the world who don't trust their governments," Andrew Milne, chief investment officer and co-founder of cryptocurrency-focused hedge fund Altana Digital Currency Fund, tells Bloomberg. "There are many countries where people are looking for an asset that isn't vulnerable to banks blowing themselves up.''

Golix, Zimbabwe's cryptocurrency exchange, processed more than $1 million in transactions in the past month, a tenfold increase from all of 2016. It is an unregulated platform and prices for bitcoin and other currencies are set by supply and demand, Taurai Chinyamakobvu, Golix's co-owner, tells Bloomberg.

For years, Zimbabwe has struggled with high rates of currency inflation. The country stopped using its own Zimbabwean dollar in 2009 after hyperinflation rendered it nearly worthless. Prior to that, its reserve was printing notes in denominations as high as $100 trillion.

Since the collapse of the Zimbabwean dollar, the country has used U.S. dollars, South African rand, and more recently of course, bitcoin and other digital currencies.

Published on: Nov 17, 2017