Zimbabwean Residents and Institutions Can Now Use Gold-Backed Tokens for Domestic Transactions
The Reserve Bank of Zimbabwe (RBZ) has announced that residents and institutions in Zimbabwe can now pay or settle domestic transactions using gold-backed digital tokens. The RBZ governor, John Mangudya, stated that the central bank has engaged external auditors to validate the availability and adequacy of gold for the tokens.
Preserving Value with Gold-Backed Tokens
According to Mangudya, the gold-backed digital tokens, known as ZIG tokens, are not only an approved method of payment but also serve as a value preservation instrument. The RBZ has been working on the necessary infrastructure to support these tokens.
Buying Digital Tokens with Local Currency
Prior to launching the gold-backed digital tokens, the RBZ had introduced physical coins for the same purpose. The value of ZIG tokens is determined by their equivalence to the physical Mosi-au-Tunya gold coin and influenced by international gold prices. Banks will have dedicated ZIG accounts and facilitate transactions in ZIG similar to local and foreign currencies.
The applicable money transfer tax for ZIG transactions will be half the rate applied to foreign currency-denominated transactions. Both individuals and institutions can purchase ZIG tokens using local or foreign currency.
Ensuring Transparency with External Auditors
To address concerns, Mangudya assured skeptics that external auditors have been enlisted to verify the availability and adequacy of gold for ZIG tokens. However, the names of these auditors have not been disclosed in the central bank’s statement.
Hot Take: Boosting Confidence in Digital Transactions
The introduction of gold-backed digital tokens in Zimbabwe provides residents and institutions with a reliable and transparent method for domestic transactions. By ensuring the availability of gold through external audits, the central bank aims to boost confidence in the value and stability of these tokens. This move aligns with global trends in adopting digital assets backed by tangible assets like gold, offering a potential solution to inflation and currency depreciation.
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