The RBZ Governor revealed the bank’s plan to launch a national awareness campaign to drive the adoption of the asset.
The Reserve Bank of Zimbabwe (RBZ) has shared its plans to launch its gold-backed digital token (GBDT) for retail transactions. The Bank first introduced the Gold-Backed Digital Tokens (GBDT) in May. Its introduction formed part of a series of measures to stabilize the local currency suffering significant depreciation. With inflation at 175.8% in June, there was strong domestic investor demand for convenient and reliable market-based instruments.
Investors Embrace GBDT
First, the RBZ began by issuing physical gold coins which were quickly snatched up by investors. Thereafter, it unveiled the GBDT with its greater possibilities. Physical gold held at the bank backs up each GBDT. Further, the GBDT allows investors to store value without worrying about the risk of keeping physical gold coins. Also, the tokens can be divided into smaller units, increasing their accessibility.
Consequently, RBZ Governor John Mangudya noted that the token issuance was hugely successful with investors. Within a month of introducing GBDT, the bank issued the token 11 times to cater to the 590 applications. These were valued at ZW$50.50 billion and US$7,794.87.
“Continued uptake of the GBDTs is envisaged to sustainably anchor inflation and exchange rate expectations,” the bank said.
Gold-Backed Digital Token to Become the Foundation for CBDC Development
RBZ received Cabinet approval to proceed with developing a CBDC in July 2022. According to a recent survey, 71% of respondents want a CBDC. Consequently, the GBDT could become the basis for its CBDC development, according to RBZ.
Already, the gold-backed digital token possesses many features of a CBDC. For this reason, the bank believes rolling out GBDT for transactions is an appropriate next step on its path to a functional CBDC.
“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 said. Consequently, the bank is liaising with key stakeholders like the Confederation of Zimbabwean Industries (CZI). These have shown their interest in issuing GBDT-denominated cards.
The RBZ Governor revealed the bank’s plan to launch a national awareness campaign to drive the adoption of the asset. The campaign will educate the public on the use and benefits of GBDT. RBZ believes that GBDT will complement the use of the US dollar in domestic transactions when fully launched.