The Reserve Bank of Zimbabwe Plans to Launch a Gold-Backed Digital Currency
The Reserve Bank of Zimbabwe (RBZ) is in the advanced stages of developing a gold-backed digital currency. The currency will be backed by gold bullion held by the central bank and is intended to stabilize the Zimbabwean dollar and provide a hedge against inflation.
Main Points:
- The RBZ’s Gold-Backed Digital Token (GBDT) is the initial step towards the launch of the digital currency.
- The GBDT has been used for 11 issuances, with 590 applications received to purchase tokens equivalent to 325.02 KG of gold.
- The RBZ plans to roll out the GBDT for transactional purposes in Phase II of the project, under the name ZiG (Zimbabwe Gold).
- By transitioning GBDTs to a currency used for everyday transactions, the RBZ is proposing the use of the tokens as a central bank digital currency (CBDC).
- Unlike most CBDCs, GBDTs are backed by gold reserves, reflecting a growing interest in digital gold and a preference for de-centralization.
Hot Take:
The RBZ’s plan to launch a gold-backed digital currency reflects the global trend towards exploring and adopting digital currencies. By backing the currency with gold reserves, the RBZ aims to provide stability and address inflation concerns. This move aligns with the growing interest in digital gold and challenges the centralized power of traditional fiat currencies. It will be interesting to see how this initiative progresses and its potential impact on Zimbabwe’s financial system.
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