Residents will be able to exchange Zimbabwean dollars for a digital gold token, which will protect against currency instability.
The Reserve Bank of Zimbabwe (Central Bank) on Monday, May 8, launched a national digital currency backed by gold, which will serve as legal tender in the country. This was reported by the Zimbabwe Broadcasting Corporation.
The move is a government initiative to stabilize the local currency from depreciation against the US dollar.
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“Digital gold tokens will help stabilize the country’s financial system. They help protect savings and facilitate transactions. The tokens should help reduce domestic demand for US dollars and in- the depreciation of the national currency is moderate,” said the head of the Reserve Bank, John Mangoudia.
Each Zimbabwe digital token is backed by 1g of gold. For individuals, the minimum amount of tokens should be equal to $10, for legal entities – $5,000. Special accounts were opened for consumers, which looked like digital wallets and special deposits.
The gold tokens will circulate in Zimbabwe alongside the gold coins that arrived last year.
In 2022, Zimbabwe produced a record 35.38 tonnes of gold in its history. The country ranks eighth in Africa in terms of gold production.
The bet on expanding the use of gold in the national monetary system was made in the context of a significant fall in the exchange rate of the Zimbabwean dollar this year. Zimbabwe’s currency is trading at about 1,070 zealand dollars to the dollar.
One of the main economic problems in Zimbabwe is high inflation. Food inflation in Zimbabwe reached 285% in April. This is the highest number among all countries in the world at this time. Since 2000, US and EU sanctions have been in effect against Zimbabwe.
Recall that in 2021, Nigeria launched its digital currency. The digital naira is not a cryptocurrency, and its rate is pegged to the national currency of Nigeria.
Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.