The Reserve Bank of Zimbabwe (RBZ) has introduced a digital currency backed by gold on May 8 2023 as it steps up measures to stabilize the tumbling Zimbabwe dollar and offer an alternative to the US dollar.
🇿🇼 Applications for the RBZ Gold-Backed Digital Tokens must be for a minimum of US$10 for individuals and US$5,000 for financial institutions, corporates and other entities.
The gold-backed digital tokens can be used both as a means of payment and a store of value, says the… pic.twitter.com/cGl8bnOuON
— BitKE (@BitcoinKE) May 9, 2023
In a press release the RBZ had earlier said the issuance of the gold-backed digital tokens is meant to expand the value-preserving instruments available in the economy and enhance the divisibility of the investment instruments and widen their access and usage by the public.
Zimbabwe Gold-backed digital tokens to go live on May 8 2023.
Banks will create special wallets to hold the digital tokens.https://t.co/p4aalYbYPj pic.twitter.com/LQoEZJczJ0
— BitKE (@BitcoinKE) April 29, 2023
The new digital tokens are expected to complement the Mosi – a – Tunya physical gold coins released by the Reserve Bank of Zimbabwe in 2022 and have reportedly been successful in taming the country’s inflation. As previously reported by BitKE, gold coins have helped fight inflation from over 30% to 1% in just 6 months as of January 2023.
According to the banks’s statement, the first phase will see the gold-backed digital coins issued for investment purposes with a vesting period of 180 days and redeemable in the same way as the existing physical gold coins.
“The tokens will be available for sale, through banks, in both foreign currency and Zimbabwe dollar. Banks will create dedicated or specific accounts for the holding of the gold-backed digital tokens (e-gold wallets or e-gold cards). Holders of physical gold coins, at their discretion, will be able to exchange or convert, through the banking system, the physical gold coins into gold-backed digital tokens,” the central bank said.
The second phase will see the gold-backed digital tokens held in either e-gold wallets or e-gold cards that will be tradable and capable of facilitating Person-to-Person (P2P) and Person-to- Business (P2B) transactions and settlements.
“It, therefore, means that the gold-backed digital tokens would be used both as a means of payment and a store of value.”
International gold prices determined by the London Bullion Market Association will dictate the local pricing of the tokens, Mangudya said. Payment for the gold-backed digital tokens or physical gold coins in the Zimbabwe dollar, according to the RBZ, shall remain at the current 20% margin above the willing-buyer willing-seller interbank mid-rate.
Over the past year, the value of the Zimbabwean dollar has declined significantly, with one US dollar now worth approximately 1,000 Zimbabwean dollars, compared to 150 Zimbabwean dollars a year ago.
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