By
Godfrey Benjamin
April 23rd, 2024
Zimbabwe seeks to use gold-backed crypto tokens to salvage the country’s economic situation.
The Reserve Bank of Zimbabwe has dammed any potential consequences by selling 14 billion Zimbabwean dollars ($39 million) worth of gold-backed digital tokens. That is despite an earlier warning it received from the International Monetary Fund (IMF) not to go ahead with the plans. At the time, the International body cautioned about the potential risks of the plan, suggesting that Zimbabwe would be better off liberalizing its foreign exchange market.
As of May 12, the apex bank of Zimbabwe confirmed that it received 135 applications for the gold-backed cryptocurrency. The Friday announcement also noted that, cumulatively, it made a total of 14.07 billion Zimbabwean dollars from the sale.
Recall that Zimbabwe first introduced the crypto tokens last month, noting that they are backed by 139.57 kilograms of gold. It then kicked off the sale on May 8 and allowed it to run through May 12. And while it sold the tokens at a minimum price of $10 for individuals, corporate entities bought them for $5,000.
As it turns out, Zimbabwe is currently planning another sale round for the digital tokens. According to the central bank, interested buyers may submit their applications between now and May 18th.
Reserve Bank of Zimbabwe Aims to Use Gold-Backed Token to Improve Economy
Like most countries around the world, Zimbabwe is currently facing a turbulent time in its economy. More so, its local currency has been consistently falling against the US dollar. Hence, the reason it seeks to use gold-backed crypto tokens is to salvage the country’s economic situation.
According to a local news report from Herald, RBZ Governor Dr. John Mangudya says the gold-backed digital tokens provide Zimbabwe with more options to preserve value. Mangudya also claims that the tokens will “enhance divisibility of the investment instruments and widen their access and usage by the public”.
For what it’s worth, it appears that Zimbabwe has carried out due diligence as earlier suggested by the IMF. That is, the African nation seems to have determined that the benefits of its gold-backed token plan outweigh the costs and potential risks.