Zimbabwe launches digital currency backed by gold as the local currency fails
The Reserve Bank of Zimbabwe (RBZ) is set to launch a digital currency backed by gold stored at the institution. The digital currency will be accepted as legal tender for all transactions and has been introduced as part of the measures to stabilize the failing local currency and stop it from further depreciating against the US dollar.
According to John Mangudya, the RBZ governor, those who possess small amounts of Zimbabwean dollars will be able to exchange their cash for digital gold tokens in order to store value and protect against exchange rate volatility. He stated, “So that we leave no one and no place behind.”
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According to Mangudya, the market’s present exchange rate volatility is a result of assumptions that when the tobacco auction season began in March, there would be an increase in the availability of foreign currency. Zimbabwe has shipped 54.9 kg of tobacco worth $307 million since the auction season began. It handled 57 million kg of cargo valued at $295.5 million during the same time period last year.
According to Mangudya, the parallel market exchange rate is anticipated to start stabilizing this week when tobacco farmers start getting their share of US dollar payments. He stated that “since the tobacco marketing season began, the majority of the proceeds have been used to fulfill the commitments of tobacco contractors.
