Central Bank of Zimbabwe to Launch Gold-Backed Digital Currency

SEATTLE (Scrap Monster): The Central Bank of Zimbabwe announced plans to introduce a gold-backed digital currency as a legal tender. The move is aimed at stabilizing the country’s local currency. It must be noted that the country’s currency has been witnessing prolonged depreciation against the U.S. dollar.

John Mangudya, Central Bank Governor noted that the move will enable small amounts of Zimbabwean dollars to be exchanged for the digital gold token, thus providing a hedge against high volatility in currency. The tokens will boost purchase of gold units using low amounts of currency.

The local currency trades at 1,001 ZWL against $1, but has an exchange rate of 1,750 ZWL per dollar on the streets of country’s capital, Harare. The introduction of the gold-backed digital currency will stabilize the exchange rate in the country’s parallel market, Mangudya added.

The country has been hit hard by currency volatility and inflation over the past ten years. The country had adopted the U.S. dollar as its currency in 2009, but reintroduced the Zimbabwean dollar later in 2019, in an attempt to revive the struggling Zimbabwean economy. Again, during the previous year, the country’s central bank allowed the use of U.S. dollar, in order to curb rising prices.

YOU MAY ALSO BE INTERESTED IN:

IBMC Launches World's First Gold-backed Digital Gold Currency

Bitcoin Has a Definite Upper Hand in Comparison with Gold