Zimbabwe to Launch Gold-Backed Digital Currency
Zimbabwe’s central bank has announced plans to introduce a gold-backed digital currency to the public from May 8th. The move is aimed at stabilizing the country’s currency, which has fallen 35% against the US dollar this year, and providing an alternative to the US dollar for transactions.
The digital tokens will be sold through banks in local and foreign currency at a 20% margin above the interbank mid-rate, and will be introduced in two phases. Initially, they will be used for investment purposes before being rolled out for transactions.
According to the central bank governor, John Mangudya, the tokens are intended to expand the value-preserving instruments available in the economy, enhance the divisibility of investment instruments, and widen their access and usage by the public.
To support the project, the central bank has been building gold reserves and acquiring other precious minerals since 2022. The bank’s monetary policy committee member, Persistence Gwanyanya, has stated that the project will require approximately $100 million of gold.
The plan for the digital currency was approved by the monetary policy committee in March, following the introduction of gold coins as a store of value in Zimbabwe in 2022. Nigeria became the first African country to launch a digital currency in 2021.
