BSV
$66.66
Vol 94.61m
-14.37%
BTC
$97625
Vol 147284.81m
-1.87%
BCH
$557.08
Vol 1294.1m
-9.1%
LTC
$109.94
Vol 2337.66m
-16.27%
DOGE
$0.4
Vol 14969.37m
-9.87%
Getting your Trinity Audio player ready...

The Reserve Bank of Zimbabwe (RBZ) has announced the launch of a digital currency backed by gold for investors to preserve their wealth amid galloping inflation in the country.

Zimbabwe’s central bank made the disclosure via an official press release for corporate and individual investors to apply for issuance. The statement added that the token will be made available via commercial banks and will be denominated in both local and foreign currency.

“The RBZ Gold-backed Digital Tokens are being issued to expand the value-preserving instruments available in the economy, enhance divisibility of the investment instruments and widen their access and usage by the public,” the statement read.

Zimbabwe’s banking regulator stated that commercial banks will create new classes of accounts to store the gold tokens via e-gold wallets or e-gold cards. It appears that holders of physical gold coins can exchange their holdings for digital versions.

A core feature of Zimbabwe’s new gold-backed tokens is its fractionalization, allowing individual investors to buy tokens for as low as $10. Corporate investors are expected to invest a minimum of $5,000, with the RBZ having the right to accept or reject applications.

Generally, applications will be rejected by the central bank if the source of funds is from borrowings or proceeds of crime. Commercial banks have been urged to beef up their Know Your Customer (KYC) processes to meet national anti-money laundering (AML) guidelines.

“The digital tokens can be redeemed after the vesting period of 180 days, based on the international gold price as determined by the London Bullion Market Association (LBMA) PM fix, payable in either local or foreign currency as is the case with physical gold coins,” the statement read.

The nagging challenge of acceptability

At the moment, it is unclear if Zimbabweans will adopt the gold-backed tokens in the same manner as the U.S. dollar. One cross-section of analysts has posited that the high demand for the physical gold coins serves as a pointer that its digital iteration will be sought after by investors.

Experts have hailed the minimum deposits of $10 and $5,000 for both individuals and corporations as a move to trigger investors. However, there are concerns that certain investors will stick with investing in U.S. dollars rather than the central bank’s investment instruments.

“The acceptance of digital gold-backed tokens by key wholesalers and retailers will be a huge relief to the transacting public,” Persistence Gwanyanya, a member of the RBZ Monetary Policy Committee, noted. “We hope schools and medical service providers will cooperate and accept the digital gold-backed tokens for transactions.”

CoinGeek Conversations with Catherine Lephoto: How blockchain is transforming health and education in Africa

Recommended for you

Last Week in AI: Google, OpenAI leads generative AI video creation
This week in the AI space saw Google and OpenAI's race to bring generative AI videos, Intel's CEO resignation, and...
December 9, 2024
Philippines rises 31 spots in UN e-Participation Index
The Philippines has achieved a remarkable milestone in the 2024 United Nations e-Participation Index, securing the 49th spot among 193...
December 9, 2024
Advertisement
Advertisement
Advertisement