Zimbabwe to introduce gold-backed digital currency

To combat the falling value of the Zimbabwean currency, the Reserve Bank of Zimbabwe (RBZ) has announced plans to introduce a gold-backed digital currency. The digital gold tokens will be a form of electronic money, backed by gold held at the RBZ. This will enable holders of small amounts of Zimbabwean dollars to exchange their money for tokens and protect themselves against exchange rate fluctuations.

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Zimbabwe’s dual currency structure:

The Zimbabwean economy operates on a dual currency structure, with the Zimbabwean dollar and the U.S. dollar in use. The U.S. dollar currently dominates and accounts for about 70% of domestic transactions, according to the RBZ. In an effort to halt the collapse of the Zimbabwean dollar and reduce the demand for the U.S. dollar, the RBZ introduced gold coins in July 2022.

The RBZ had re-introduced the Zimbabwean dollar in 2019, replacing the previous multiple currency system that had been in place since 2009, when the country abandoned its old local dollar due to years of hyperinflation.

Due to the outbreak of the COVID-19 pandemic in 2020, the Zimbabwean government permitted individuals with free funds to use their foreign currency to make domestic payments for goods and services. This policy led to the current dual currency system, where the Zimbabwean dollar and the U.S. dollar are both in use for domestic transactions.

Zimbabwe: Important Facts:

Location: Zimbabwe is a landlocked country located in southern Africa.
Capital City: Harare is the capital city of Zimbabwe.
Population: The estimated population of Zimbabwe as of 2021 is around 15.2 million.
Official Languages: English, Shona, and Ndebele are the official languages of Zimbabwe.
Currency: The Zimbabwean dollar is the official currency of the country.
President: The current President of Zimbabwe is Emmerson Mnangagwa