The Strategist

Zimbabwe ponders introducing gold-backed digital currency

04/24/2023 - 03:16

A digital currency backed by gold will be introduced by the Reserve Bank of Zimbabwe (RBZ). John Mangudya, the chairman of RBZ, revealed it to the Sunday Mail, a local newspaper.

Ville Saalo
Ville Saalo
As mentioned, the introduction of digital currency is one of the initiatives the nation's central bank is making to stabilize the national currency.

Small bank depositors who will be able to move their funds into them to protect themselves against a collapse in the Zimbabwean dollar are anticipated to be the main buyers of the "gold" tokens.

This is the second time that RZB has used gold to safeguard its local currency. The bank released gold coins last year in an effort to reduce the amount of extra money in circulation.

In 2009, during a severe hyperinflationary time, the nation abolished its own currency, the Zimbabwean dollar, and replaced it with the US dollar and the South African rand. Ten years later, the Zimbabwean dollar was reinstated. According to Bloomberg, the US dollar was reinstated as legal money alongside the domestic currency in June 2022. The grey markey rate is Z$1750 per US dollar, whereas the official exchange rate is Z$1000.