On Monday May 8 2023, the Central Bank of Zimbabwe issued a digital token that is backed by gold as legal tender.
The aim is to help stabilize the Zimbabwean dollar and protect citizens from currency fluctuations.
The gold-backed digital tokens will be a form of electronic money backed by Zimbabwe’s gold reserves, held by the Central Bank.
The Bank’s intention is to allow Zimbabwean dollar holders to exchange their currency for the gold-backed tokens, offering protection against the volatility of the local currency.
Over the past year, the value of the Zimbabwean dollar has declined significantly, with one US dollar now worth approximately 1,000 Zimbabwean dollars, compared to 150 Zimbabwean dollars a year ago.
Zimbabwe currently operates with the Zimbabwean dollar and the US dollar.
Zimbabwe has been drowning in double and sometimes triple digit inflation for over a decade.
President Emmerson Mnangagwa promised to turn his country into a middle-income economy by 2030. But since taking office, he has been unable to restore confidence in the local currency.