The Reserve Bank of Zimbabwe (RBZ) has officially launched Zimbabwe Gold (ZiG), a gold-backed digital token as a payment method, furthering the central bank’s efforts to promote national assets over foreign currencies, particularly the United States dollar.
The project’s inception dates back to April 2023 when the RBZ unveiled its plans to issue digital tokens, with each token being backed by a corresponding physical amount of gold held in the bank’s reserves. The idea of a gold-backed digital token is not entirely new, as the RBZ initiated the issuance of physical gold-backed tokens in 2022, experiencing success in their adoption.
This new digital asset, ZiG, follows a similar principle of being backed by gold reserves. It aims to provide a means for local investors to shift their investments away from the US dollar, especially in a country with a history of triple-digit inflation.
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![Zimbabwe Makes History by Legalizing Gold-Backed Digital Token image 58](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/10/image-58.png?resize=778%2C1100&ssl=1)
John Mangudya, the Governor of the Reserve Bank of Zimbabwe, explained that the introduction of gold-backed digital tokens is intended to expand the range of value-preserving instruments available in the economy. This initiative also seeks to increase the divisibility of investment instruments and make them more accessible and widely used by the public.
The digital tokens can be stored in e-gold wallets or e-gold cards and are designed to facilitate peer-to-peer and business transactions.
ZiG is available at various price levels based on the weight of its gold reserve. For instance, investors can purchase 1 ounce of ZiG for $1,910 or 0.1 ounces for $191. As reported by the bank, on September 28, investors bought the equivalent of 17.65 kilograms (kg) worth of ZiG, using both Zimbabwean and U.S. dollars. The total amount of ZiG sold since the previous rounds of digital token sales has now reached approximately 350 kg of gold.
![Zimbabwe Makes History by Legalizing Gold-Backed Digital Token image 59](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/10/image-59.png?resize=834%2C1062&ssl=1)
![Zimbabwe Makes History by Legalizing Gold-Backed Digital Token image 59](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/10/image-59.png?resize=834%2C1062&ssl=1)
Zimbabwe has faced severe currency instability and rising inflation for more than a decade. To address hyperinflation, in 2009, the nation adopted the U.S. dollar as its official currency. In an attempt to revitalize the domestic economy, Zimbabwe reintroduced its own currency in 2019. However, this move was met with renewed currency volatility, prompting the RBZ to explore alternative measures such as gold-backed digital tokens like ZiG to safeguard against economic instability and promote national assets.
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