Zimbabwe’s central bank plans to sell gold-backed digital tokens at $10 for individuals and $5,000 for corporations.
Zimbabwe’s central bank has set a price for its gold-backed digital tokens. The country is planning to sell its gold-backed digital currency to investors starting May 8. The tokens will be sold at a minimum price of $10 for individuals and $5,000 for corporations and other entities.
According to a statement released by the Reserve Bank of Zimbabwe on May 4, the gold-backed digital currency tokens will be sold in U.S. dollars and local currency. However, the local currency price will have a 20% margin above the willing-buyer willing-seller interbank mid-rate. Interested investors can participate in the offer from May 8, which will close two days later.
The willing-buyer willing-seller interbank mid-rate is the exchange rate at which banks are willing to buy and sell currencies to each other. It is considered the “midpoint” between the buying and selling rates determined by prevailing market conditions such as supply and demand. This rate is used as a benchmark for many financial transactions, and is often used as a reference rate for exchange rates quoted by banks and financial institutions.
The Reserve Bank of Zimbabwe announced its plans to introduce a gold-backed digital currency to serve as legal tender in the country on April 28.
The introduction of digital tokens is the latest move by the southern African nation to support its own local currency, which has weakened 37% against the U.S. dollar on the official market this year, according to Bloomberg.
The Monetary Policy Committee approved the plan in March, eight months after Zimbabwe introduced gold coins as a store of value to help support the local unit.
According to a Bloomberg report, Zimbabwe’s currency — the Zimbabwean dollar — is quoted at 1,001 against the U.S. dollar, but is commonly exchanged at 1,750 on the streets of Harare, the capital city of the country.
Zimbabwe has been battling currency instability and high inflation rates for over ten years. After a period of hyperinflation, the country adopted the U.S. dollar in 2009. In an attempt to revive the struggling economy, the Zimbabwean dollar was reintroduced in 2019. However, in 2022, the government reverted back to using the U.S. dollar to control rising prices.
Nigeria introduced its own digital currency — the eNaira — in 2021, becoming the first African nation to do so.