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Zimbabwe’s De-Dollarization: Central Bank to Issue Gold-Backed Digital Currency in Early May

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The Reserve Bank of Zimbabwe (RBZ) has said it will start issuing gold-backed digital tokens on May 8. The first phase of the launch will see the digital tokens being issued for “investment purposes with a vesting period of 180 days.” The RBZ also revealed that the gold-backed digital tokens “would be used both as a means of payment and a store of value.”

Gold-Backed Tokens Additional Value-Preserving Instruments

According to the Zimbabwean central bank, it plans to start issuing the recently mooted gold-backed digital currency on May 8. The digital currency, which will be backed by the gold held at the Reserve Bank of Zimbabwe (RBZ), is expected to complement the physical gold coins that went into circulation in July 2022.

The announcement of the digital currency’s issuance date came just a few days after the central bank governor, John Mangudya, was quoted revealing the RBZ’s intention to fight local currency depreciation with gold-backed digital currency. Also, as reported by Bitcoin.com News, Zimbabwe’s central bank hopes to curb the local demand for the greenback with the soon-to-be-launched digital currency.

However, in a statement issued on April 28, the RBZ governor revealed that the issuance of the gold-backed digital tokens “is meant to expand the value-preserving instruments available in the economy.” The gold-backed tokens are also intended to “enhance divisibility of the investment instruments and widen their access and usage by the public.”

Gold-Backed Digital Currency as a Store of Value

As per the statement, the issuance of the digital currency will be split into two phases. The first phase will see the digital tokens being issued for “investment purposes with a vesting period of 180 days.” According to the RBZ, the gold-backed tokens will be redeemed in the same way as physical gold coins are redeemed. Prospective buyers can acquire digital tokens using local or foreign curren

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Author: Terence Zimwara

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