The Central Bank of Zimbabwe issued a digital token that is backed by gold as legal tender on Monday (8 May 2023).
The goal is to safeguard people from currency swings and aid in stabilizing the value of the Zimbabwean dollar.
A sort of digital currency backed by Zimbabwe’s gold reserves, which are kept by the Central Bank, will be the gold-backed digital tokens.
Holders of Zimbabwean dollars will be able to exchange them for tokens backed by gold, which will provide security against the local currency’s volatility.
The Zimbabwean dollar’s value has substantially decreased over the last year; it is now almost 1,000 Zimbabwean dollars to one US dollar, compared to 150 Zimbabwean dollars a year ago.
Currently, Zimbabwe uses both the US currency and the Zimbabwean dollar to do business.
Over a decade, double and occasionally triple digit inflation has engulfed Zimbabwe.
By 2030, President Emmerson Mnangagwa promises to transform Zimbabwe into a middle-income nation. He hasn’t been able to reestablish trust in the local currency since gaining power though.
