The Reserve Bank of Zimbabwe (RBZ) has invited individuals and financial institutions to subscribe to its forthcoming gold-backed digital token, according to a notice released on Thursday. Applications for the tokens require a minimum of $10 for individuals and $5,000 for financial institutions and corporates. The digital tokens, aimed at combating Zimbabwe’s unstable local currency, will be issued on 8 May. In March, Zimbabwe’s inflation rate stood at 87.6%, having peaked at 285% in 2022.
The central bank has divided the issuance and usage of the token into two phases. During the first phase, tokens will be issued for investment purposes and sold through banks. In the second phase, tokens will be held in digital wallets or cards, facilitating person-to-person and person-to-business transactions. The bank stated that, at their discretion, holders of physical gold coins could exchange or convert them into gold-backed digital tokens via the banking system.
Starting 8 May, Zimbabwe’s gold-backed digital tokens will be available to investors at a minimum price of $10 for individuals and $5,000 for corporations and other entities. The tokens will be sold in US dollars and local currency, with the local currency price carrying a 20% margin above the willing-buyer willing-seller interbank mid-rate. The offer will close two days after its commencement.
The introduction of digital tokens is Zimbabwe’s latest effort to support its local currency, which has weakened by 37% against the US dollar on the official market this year. In 2021, Nigeria became the first African nation to introduce its own digital currency, the eNaira.
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