Zimbabwe's Central Bank Plans Gold-Backed Digital Currency to Stabilize Local Economy
The central Reserve Bank of Zimbabwe (RBZ) plans to introduce a gold-back digital currency, meant to be used as legal ledger within the country.
The new currency will be used for transactions within the South African nation as part of its plans to stabilize the local currency, The Sunday Mail reported.
This way, the central bank would move towards anchoring the Zimbabwe Dollar with gold reserves, as the digital gold tokens represent gold held in physical form by the issuing authority.
The RBZ Governor John Mangudya was quoted as saying that,
"We shall [...] soon be introducing digital gold tokens to ensure that those with low amounts of local currency are able to purchase the gold units so that we leave no one and no place behind."
The country uses the Zimbabwe Dollar and US Dollar.
The introduction of this digital gold token, per the reported plans, is meant to enable citizens who are holding small amounts of Zimbabwe Dollars to exchange it for the new token as a store of value and hedge against exchange rate volatility.
Mangudya told the news outlet that the current exchange rate volatility was caused by "expectations of increased foreign currency supply" on the market when the tobacco marketing season opened last month.
But there was a lower supply of foreign currency in the market than expected.
Therefore, he argued, "the movements in the parallel market rate" is expected to start stabilizing as tobacco farmers start getting their US Dollar payments in a matter of days.
The RBZ is also thinking of releasing more Mosi-oa-Tunya gold coins into the market as another response to the depreciation of the Zimbabwe Dollar.
Zimbabwe introduced Mosi-oa-Tunya coins last year as a response to excess liquidity and to stabilize the
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