The Reserve Bank of Zimbabwe (RBZ) has announced that it will begin issuing gold-backed digital currency on May 8. These tokens will serve as a means of payment and a store of value in the country.
The central bank plans to issue these digital tokens to expand the value-preserving instruments available in the economy, enhance divisibility of investment instruments, and widen their access and usage by the public.
The gold-backed digital tokens will be issued for investment purposes with a vesting period of 180 days in the first phase of the launch. The tokens will be redeemed in the same way as physical gold coins are redeemed, and prospective buyers can acquire them using local or foreign currency.
According to the RBZ, current holders of the Mosi-oa-Tunya gold coins will be able to acquire the digital coins using the local banking system.
The second phase of the launch will allow residents with digital tokens held in e-wallets or cards to use them to settle transactions, and the gold-backed digital tokens will be tradable and capable of facilitating Person-to-Person (P2P) and Person-to-Business (P2B) transactions and settlements.
Gold-Backed Digital Currency
This move by the RVBZ comes after the central bank governor, John Mangudya, was quoted revealing the bank’s intention to fight local currency depreciation with gold-backed digital currency. The RBZ hopes that the issuance of the gold-backed digital tokens will curb the local demand for the greenback.
The gold-backed digital currency is expected to complement the physical gold coins that went into circulation in July 2022, and it is also intended to expand the value-preserving instruments available in the economy. However, the spokesperson of Zimbabwe’s main opposition party, Fadzayi Mahere, warned in a tweet that the RBZ’s gold-backed digital currency initiative could be illegal.
In conclusion, Zimbabwe’s central bank is set to issue gold-backed digital tokens on May 8. The tokens will serve as a means of payment and a store of value, and they will be issued for investment purposes with a vesting period of 180 days in the first phase of the launch.
The second phase of the launch will allow residents with digital tokens to use them to settle transactions, and the tokens will be tradable and capable of facilitating P2P and P2B transactions and settlements.