Central Bank Digital Currencies Becoming more popular.
A new gold-backed digital currency has been introduced in Zimbabwe
Zimbabwe has launched its own CBDC (Central Bank Digital Currency) backed by Gold, in a bid to combat the financial crisis!
The southern African country now joins other African states like Nigeria, Ghana and South Africa that have introduced digital currencies, even as several others have plans in the works.
This digital currency is unique because it is backed by real gold!
Exploring Zimbabwe's Groundbreaking Digital Currency
Backed by a certain amount of gold, which helps keep its value stable, and being tied to the market value of the gold unlike a fiat currency.
The Zimbabwe gold-backed digital currency will be used as legal tender and a store of value alongside the Zimbabwean dollar and bond notes.
In April 2023, RBZ first announced the project. Each digital currency, or ZiG, corresponds to a coin of real gold that the bank holds.
The idea behind the (Zig) coin is to encourage Zimbabweans to invest in domestic assets rather than US deposits. in dollars, which is a challenging task due to high inflation rates in the country said RBZ Governor Dr Nicholas.
How Zimbabwe's Digital Currency is Revolutionizing the Economy
It is not controversial to declare 2023 an unequivocal disaster for the Zimbabwean dollar thus far, with the second quarter, in particular, seeing the currency plummet from 894 against the US dollar to more than 6,700 by the end of June.
The impact on inflation has been gruesome, to the economy of Zimbabwe
In 2009, the U.S. dollars came into play because their own currency was losing a lot of value. They tried to use their money again in 2019, but faced many financial problems. This new gold-backed digital currency is their latest idea to try to stabilize things.
With both this new Zimbabwean dollar and the US dollar qualifying as legal tender in the country, demand for the greenback (Us Dollar) has soared this year at the expense of the local currency. Now teetering on the edge of another prolonged period of hyperinflation, Zimbabweans have become desperate to get their hands on stores of value that can protect their purchasing power
Governor of the Reserve Bank of Zimbabwe John Mangudia said
“the purpose of the ZIG is to save valuable funds and make investment accessible to all.
How Zimbabweans can access this New Currency
People can put their ZIGs in a special digital wallet or card and use them for various tasks. Depending on the amount of gold in the vault, different ZIGs can be purchased at different prices. For example, the ZIG costs $1,910 for 1 ounce and $191 for 0.1 ounce.
As of September 28, people had bought 17.65 kilograms of gold equivalent to Zimbabwe’s U.S. dollar. dollar equivalent, bringing the country’s total gold reserves to about 350 kilograms.
