Zimbabwe’s central bank to launch gold-backed crypto: Report
Zimbabwe's central bank is all set to start issuing gold-backed digital tokens that will be used as legal tender in the country.
Highlights
- Zimbabwe has announced launching gold-backed cryptocurrency
- The move a part of initiative to stabalise local currency from continued depreciation against the US dollar
- The country has been fighting inflation for over a decade
The Reserve Bank of Zimbabwe (RBZ) on 23 April will soon launch a gold-backed digital currency, several reports have revealed. In fact, the move is a part of the government initiative to stabilise the local unit from prolonged depreciation against the US dollar.
Zimbabwe’s struggle with inflation
Here, it must be mentioned that the country has been struggling with currency volatility and inflation for nearly a decade. It adopted the US dollar as its currency after an episode of hyperinflation in 2009. And, the country reintroduced the Zimbabwean dollar in 2019 in a bid to revive its struggling economy. Interestingly, the US dollar was again reintroduced last year in an effort to tame the country's surging prices.
Last year, Zimbabwe’s annual inflation rarely fell below 90 percent. Moreover, its dollar has fallen steeply against other major currencies as well.
The said initiative will allow the holders of small amounts of Zimbabwean dollars to exchange their money for digital gold, thus, helping them store value and hedge against volatile exchange rates. It must be noted that the gold will remain in the custody of the issuing authority.
Dr. John Mangudya, the Governor of the Reserve Bank of Zimbabwe, has also mentioned that the central bank is planning to issue more physical gold coins. The country is using its gold reserves to draw Zimbabwe dollars out of circulation in a bid to control escalating prices. For this, the bank will issue the yellow metal in both physical and tokenised form.
