Zimbabwe to Introduce an Innovative Gold-Backed Digital Currency
The Reserve Bank of Zimbabwe (RBZ) is reportedly exploring the introduction of a gold-backed digital currency as legal tender in the country. The move is part of the government’s efforts to address the country’s fluctuating currency and use its gold reserves to peg its national currency.
The digital gold tokens will be exchangeable for small amounts of the Zimbabwean dollar, allowing holders to store value and protect themselves from exchange rate volatility.
Dr. John Mangudya, Governor of the RBZ, attributes the current currency volatility to “the expectations of increased foreign currency supply in the market when the tobacco marketing season opened.” The RBZ hopes that the introduction of the digital currency will complement the Mosi-oa-Tunya coins introduced in 2022 and encourage citizens to invest in the country’s gold industry to combat the redundancy of the Zimbabwean dollar.
The RBZ’s plan to introduce a gold-backed digital currency is a step towards using the country’s gold reserves to peg its national currency and address currency fluctuations. By introducing digital gold tokens that are exchangeable for the Zimbabwean dollar, the RBZ aims to provide citizens with a way to store value and shield themselves from exchange rate volatility.