The Zimbabwean government is being called upon to consider paying at least part of its employees’ salaries in gold coins, reports indicate.
As was recently reported the central bank is on the verge of launching the digital dollar for utilization in market transactions, thus, Zimbabweans will soon have the ability to conduct transactions using the digital dollar backed by gold.
“…We are at an advanced stage; we are at the testing stage now. Soon, we will allow the gold digital token to be used for transactions purposes just like someone buys foreign currency from the parallel market. But at the same time, we can transact with. So, the token is coming and will satisfy the same function,” an official said.
According to Zimbabwean economist, George Nhepera, paying part of the workers’ salaries with gold coins can ‘help curtail the black market dominance’ in the country’s currency market.
Nhepera’s proposal for measures to protect government workers with gold coins comes in response to the significant devaluation of the local currency experienced in June 2023. The sharp decline of the currency in the parallel market has led to widespread price increases resulting in a decline in the purchasing power of salaries denominated in the local currency.
Although some workers have expressed their preference to be paid in U.S dollars, Zimbabwean authorities argue that the country does not possess an adequate supply of the U.S dollar making it an unsustainable option.
“To this end, they should be promoted in terms of their use for both people-to-people transactions and people-to-business and business-to-business. Once this has been achieved with full market confidence, surely our government can take a giant step to include a portion, say 50% of the civil servant salaries and benefits, be paid in these innovative instruments,” the economist said.
The digital currency backed by gold went live on May 8 2023 as the southern African nation steps up measures to stabilize the tumbling Zimbabwe dollar and offer an alternative to the U.S dollar.
Zimbabwe used nearly 140 kilograms of gold reserves to back the first sale of its digital money.
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