Central Bank of Zimbabwe Invites Citizens to Subscribe to Gold-Based Digital Currency

Liputan6.com, Jakarta – The Reserve Bank of Zimbabwe (RBZ) invites individuals and financial institutions in the country to subscribe to a gold-backed digital token. Token purchases must be a minimum of USD 10 for individuals and USD 5,000 for financial institutions and companies.

The Central Bank of Zimbabwe announced last April that a token meant to counter the volatile local currency, would be issued on May 8, 2023. The move aims to shore up the national currency, the Zimbabwean dollar, which is depreciating rapidly amid years of economic woes. years in the southern African country.

As an illustration, in March inflation in Zimbabwe reached 87.6 percent, after hitting a high of 285 percent in 2022.

The central bank has divided the issuance and use of tokens into two phases. In the first phase, tokens will be issued for investment purposes and available for sale via banks. Tokens will be stored in digital wallets or cards and made available for transactions between individuals as well as for individuals to business entities or vice versa in the second stage.

“Holders of physical gold coins, at their discretion, will be able to exchange or convert, through the banking system, physical gold coins into gold-backed digital tokens,” the bank said, quoting CoinDesk, Saturday (6/5/2023).

Confidence in Zimbabwe’s currency was extremely low after people’s savings in 2008 were wiped out by hyperinflation, which reached 5 billion percent, according to the International Monetary Fund, almost a world record.

Hyperinflation resulted in the country at one point issuing Zimbabwean 100 trillion dollar banknotes before the government was forced to temporarily suspend the currency and allow the US dollar to be used as legal tender.

Black market

In 2019, the government reintroduced the Zimbabwean currency and banned foreign currency for local transactions. But few took notice and the black market boomed, while the local currency was quickly devalued. The government relented and overturned the US dollar ban.

With that inflationary debacle in mind, many people today prefer to find scarce US dollars on the illegal market to keep at home as savings or for day-to-day transactions, where the US currency is still used. Confidence in the Zimbabwean dollar is so low that many retailers and even some government agencies do not accept it.

Zimbabwe has tried to prevent its currency from depreciating with unusual ideas before. In July 2022, gold coins were launched as legal tender to stabilize the local currency.

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