In a report published on Thursday, the Reserve Bank of Zimbabwe (RBZ) urged citizens and financial organisations to subscribe to its impending digital token backed by gold. According to the notification, applications for the tokens must be for a minimum of $10 for private parties and $5,000 for businesses and financial organisations.
The Reserve Bank of Zimbabwe said on May 4 that the gold-backed digital currency tokens will be offered for sale in both local money and US dollars. The gold-backed digital currency tokens will be offered for sale in both U.S. dollars and local currency, according to a statement issued by the Reserve Bank of Zimbabwe on May 4. The price in local currency will still be 20% more than the buyer seller interbank mid-rate.
TodayQ revealed in November 2022 about the CBDC plans that were set by the country. The country invited feedback and suggestions for its adoption during this time frame. Later, The Reserve Bank of Zimbabwe announced its plans to introduce digital money backed by gold in April. It further said that although the tokens are technically a type of central bank digital currency (CBDC), they should truly be seen as digital gold. Thus, the release of the digital token was long seen coming.
For more than 10 years, Zimbabwe has struggled with severe currency volatility and high inflation rates. In 2009, following a period of hyperinflation, the nation switched to the US dollar. The year 2019 saw the return of the Zimbabwean dollar in an effort to boost the faltering economy. To counteract price increases, the government switched back to utilising the U.S. dollar in 2022.
In an effort to stabilise its shaky local currency, RBZ declared in April that the tokens will be released on May 8 and will close two days later. Zimbabwe’s inflation rate in March was 87.6%, down from a peak of 285% in 2022. The issue and use of the token have been divided into two parts by the central bank. Tokens will be released for investment purposes in the initial phase and sold through banks. In the second phase, tokens will be stored on digital cards or wallets and will be usable for both individuals and individual-to-business operations, says the report.
Some countries, like China, India, Nigeria, and the Bahamas, have already adopted digital currencies. The US is still hesitant to create a centralised digital currency, which has stopped them in their tracks.Japan recently revealed intentions to pilot its digital currency in advance of potential implementations. Following Nigeria, Zimbabwe will be the second nation to introduce its own digital currency in the continent of Africa. This adoption will thus be another step for African countries achieving a growth in the economy.