Zimbabwe to launch gold-backed digital currency

The Reserve Bank of Zimbabwe (RBZ) plans to issue a gold-backed digital currency as legal tender to stabilise the economy. According to the Sunday Mail.

According to the RBZ, the token will be a new form of electronic money. The initiative will allow holders of the Zimbabwean dollar (ZWL) to exchange it for a gold-backed token, hedging against the volatility of the local currency.

“We are meeting demand for saving instruments by increasing the number of gold coins on the market,” said RBZ chair John Mangudya.

According to him, the volatility of the ZWL forces locals to convert it into foreign assets. A year ago, one local dollar was equivalent to $150. According to Investing.com data, at the time of writing the country7s currency was already 1,000 times cheaper than the U.S. dollar.

In December 2021, the Swiss crypto-bank SEBA released a gold-backed token that would allow investors to own a digital form of the precious metal through a ‘fully regulated, economical and forward-looking solution’.

In February 2022, the Japanese trading firm Mitsui announced a gold-backed stablecoin.

Later, U.S. Senators proposed launching a gold-backed digital currency for the state of Texas.