Zimbabwe is set to offer its gold-backed digital currency for investors at a minimum price of $10 for individual buyers and $5,000 for businesses and other entities. The offer will be available for a limited time from May 8, 2023, to May 10, 2023.
The Reserve Bank of Zimbabwe announced the availability of digital currency tokens on May 4, 2023. The tokens can be purchased with US dollars and local currency, with the price in the local currency set 20% higher than the willing-buyer willing-seller mid-rate. The willing-buyer willing-seller interbank mid-rate is widely used as a benchmark for exchange rates quoted by banks and other financial institutions and is also a standard for many financial transactions.
The Monetary Policy Committee approved the gold-backed digital currency initiative in March 2023. This move aims to protect Zimbabwe’s local currency from severe volatility and high inflation rates that have plagued the country for over a decade.
The Zimbabwean dollar (ZWL) was reintroduced in 2019 to help revive the struggling economy. However, to combat rising prices, the government switched to using the US dollar again in 2022. Though the Zimbabwean dollar (ZWL) is listed at 1,001 against the USD, it is typically traded at 1,750 on the streets of Harare, the nation’s capital.
The Reserve Bank of Zimbabwe’s move to launch a digital currency backed by gold is expected to strengthen the local currency, which has fallen 37% against the USD on the official market this year. The gold reserves backing Zimbabwe’s digital tokens will add stability to the country’s monetary system and could potentially attract investors looking for an alternative store of value.
Zimbabwe’s gold-backed digital currency will be accepted as legal tender in the country. This makes the country the second African country to do this. Nigeria is the first country in Africa to do so after introducing its digital currency, the eNaira, in 2021.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
