Zimbabwe's digital tokens out early May

The Reserve Bank of Zimbabwe yesterday said it would start issuing gold-backed digital tokens on May 8.

“Pursuant to the resolution of the Monetary Policy Committee (the MPC) on 28 March 2023 to complement the issuance of physical gold coins with gold-backed digital products, the Bank wishes to advise that it will be issuing gold-backed digital tokens with effect from 8 May 2023. The gold-backed tokens will be fully backed by physical gold held by the Bank,” the RBZ announced in a statement this Friday.

The RBZ said that the issuance and usage of the gold-backed digital tokens shall be in two phases:

The first phase is for investment purposes with a vesting period for 180 days. Transaction will be through the banking system.

Phase 2 will see digital tokens held in e-gold wallets or e-gold cards becoming tradable in ordinary transactions between individuals, businesses and businesses and individuals.

The development comes as the central bank appears to have lost control of the local currency with the black market rate once again far outstripping the official rate leading to runaway inflation and rejection of the Zim dollar.

“The Bank also advises that the pricing of the gold-backed digital tokens in foreign currency shall remain the same as the pricing model of the physical gold coins as informed or guided by the international gold price as determined by the London Bullion Market Association (LBMA) PM fix. Payment for the gold-backed digital tokens or physical gold coins in Zimbabwe dollar shall remain at the current 20% margin above the willing-buyer willing-seller interbank midrate,” further reads the statement.

The RBZ introduced gold coins in 2022 to protect value for those holding cash.