Zimbabwe’s central bank to issue gold-backed cryptocurrency

With it, the authorities intend to stabilize the national currency’s rate

25.04.2023 - 11:30

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What’s new? The Reserve Bank of Zimbabwe (RBZ) unveiled a digital currency project backed by gold. It is planned that it will become legal tender within the country. The launch of the new asset type is designed to protect the national currency, the Zimbabwean dollar (ZWL), from price fluctuations. This is reported by the local publication The Sunday Mail.

News on The Sunday Mail’s website

What else is known? Zimbabweans will be able to exchange ZWL for a new cryptocurrency whose collateral will be held by the central bank. The initiative is designed to reduce the rate of depreciation of ZWL, which was withdrawn from circulation in 2009. Instead of the Zimbabwean dollar, the country has been using a quasi-currency in the form of surrogate dollars pegged to the US dollar at a 1-to-1 ratio for several years. The currencies of neighboring states are also popular, as is the British pound sterling.

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The authorities reintroduced the Zimbabwean dollar in 2019, but the currency has faced high volatility. According to Investing.com, 1 US dollar equals 1000 ZWL on April 24. The exchange rate was 1 to 150 a year ago. In March, the annual consumer price inflation in the country was 87,6%.

Africa’s high inflation rate has led to the region actively working to introduce central bank digital currencies (CBDCs). In October 2021, Nigeria launched the ENaira asset. This was followed by plans to launch a digital shilling in Tanzania. In April 2022, the CAR became the first state in Africa to legalize bitcoin as a legal tender, and in July the country launched its own national cryptocurrency, Sango Coin.

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