Zimbabwe launches gold-backed digital token ZiG
In April 2023, the Reserve Bank of Zimbabwe introduced a new initiative that involved backing digital tokens with specific quantities of physical gold stored in the bank’s reserves. The gold-backed digital token, known as Zimbabwe Gold (ZiG), officially began accepting payments on October 5, as announced by the Reserve Bank of Zimbabwe (RBZ).
In April 2023, the RBZ unveiled its innovative approach, stipulating that each issued digital token would be supported by a defined amount of actual gold held in the bank’s reserves. Following a successful implementation, the RBZ initiated the release of real gold tokens last year.
Both physical coins and the newly launched ZiG aim to attract local investors to invest in domestic assets, moving away from relying on the US dollar. This is a challenging task in a country facing triple-digit inflation rates. Dr. John Mangudya, the governor of the RBZ, previously explained the purpose of these gold-backed digital tokens:
“The issuance of the gold-backed digital tokens is meant to expand the value-preserving instruments available in the economy and enhance the divisibility of the investment instruments and widen their accessibility and usage by the public.”
These digital tokens are tradeable for P2P and commercial transactions and can be stored in e-gold wallets or e-gold cards.
The RBZ has established various pricing levels for ZiG based on its gold reserves. For example, 1 ounce of ZiG is priced at $1,910, and 0.1 ounce costs $191. According to the bank, investors made purchases totaling 17.65 kilograms of ZiG on September 28, using both Zimbabwean and US currencies. In total, approximately 350 kilograms of gold have been sold as ZiG in previous rounds of digital token sales.
For over a decade, Zimbabwe has grappled with rising inflation and currency instability. In 2009, due to hyperinflation rendering the local currency almost worthless, the country adopted the US dollar as its official currency. In an attempt to boost the domestic economy, Zimbabwe reintroduced its own currency in 2019. However, this shift led to renewed currency volatility.
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