A gold-backed digital currency is planned in Zimbabwe in the latest attempt to stabilise the country’s ‘tumbling currency’ and offer an alternative to the US dollar, Bloomberg reports.
Zimbabwe plans selling the tokens to the public from May 8.
Zimbabwe’s local currency has this year declined 35% against the US dollar, which superseded it as the preferred currency for transactions.
Reserve Bank of Zimbabwe governor John Mangudya announced that the tokens, to be sold through banks in local and foreign currency at a 20% margin above the interbank mid-rate, would be introduced in two phases.
Mangudya 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.’
Bloomberg reports that the central bank has been building gold reserves and acquiring other precious minerals since the introduction of a policy in 2022 that compels miners to pay part of their royalties in cash and metal. It is banking on the stash to help it with the latest plan.
It quotes Persistence Gwanyanya, a member of the central bank’s monetary policy committee, as saying this week that central bank needed about R1.8 billion of gold for the project.