The Central Bank of Zimbabwe plans to offer gold-backed digital tokens to investors from May 8, for which it sets the selling price.
The Central Bank of Zimbabwe plans to sell gold-backed digital tokens for $10 for individuals and $5,000 for corporations. According to the bank statement on May 4, gold-backed digital currencies will be available in both US dollars and local currencies. The central bank also underlined that the interbank medium rate will have a margin above 20 percent.
Digital Asset Aimed to Protect Against Inflation
The Central Bank of Zimbabwe announced on April 28 that it plans to create a gold-backed digital currency to be used as a legal tender in the country.
Zimbabwe’s move was made to support its local currency, which has weakened 37 percent against the US dollar in the official market this year, according to Bloomberg. Zimbabwe’s digital asset plan was approved by the monetary policy board in March.
According to Bloomberg’s report, the country’s currency, the ZWL, is trading at 1.001 against the US dollar, while it is usually priced at $1,750 on the streets of Harare, the country’s capital.
The country has been struggling with currency instability and high inflation rates for over a decade. After a period of hyperinflation, the country adopted the USD in 2009. The Zimbabwe dollar was reintroduced in 2019 to revive the struggling economy. However, the government returned to using the USD last year to control rising prices.
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