Zimbabwe central bank close to introducing gold-backed digital tokens into retail

nestorsauer8 15. August 2023 0

The Reserve Bank of Zimbabwe (RBZ) expects to launch its gold-backed digital token (GBDT) for retail use quickly, the RBZ has said. This follows the token’s success with traders, which the bank described as “commendable” in a latest report.

The RBZ announced the introduction of the GBDT in April and had performed 11 issuances representing 325 kilograms (716.5 kilos) of gold by July 21, in accordance to a midterm monetary report the bank released on Aug. 9. The tokens are backed by bodily gold held by the RBZ.

Now, the GBDT “shall be scaled up to be used for transactional purposes by the public.” The RBZ mentioned:

“The Bank is at an advanced stage in preparations for the rolling out of GBDTs for transactional purposes in Phase II of the project. […] It is envisaged that the transactional phase will see GBDTs [complementing] the demand for the US dollar in domestic transactions as retailers will be offered a safer, more convenient, and value-preserving medium of exchange.”

The GBDT issuance got here after the RBZ started issuing bodily gold cash final yr. Those have been snatched up by traders, and solely 2% of them have been redeemed, the RBZ mentioned. The GBDT provides the benefits of divisibility and elevated safety, the bank claimed.

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Inflation in Zimbabwe reached 175.8% in June after the bank adopted a brand new benchmarking index. The RBZ set its rate of interest at 150% that month. The U.S. greenback is closely utilized in native commerce.

Annual inflation in Zimbabwe. Source RBZ/ZIMSTAT

The RBZ has been pursuing a central bank digital forex (CBDC) since July 2022 and mentioned it’s making regular progress. It performed a survey that discovered 71.7% of respondents can be keen to use it. The GBDT would “form the basis for the development” of a CBDC, because it “exhibits most of the characteristics of a CBDC.”

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