• Zimbabwe is planning to introduce a gold-backed digital currency as legal tender to stabilize its currency, the Zim dollar.
• The tokens will be backed by the country’s gold reserves and held by the central bank.
• Other African countries have also been exploring CBDCs; Nigeria launched its eNaira in October 2021.
Zimbabwe Introduces Gold-Backed Digital Currency
The Reserve Bank of Zimbabwe (RBZ) plans to introduce a gold-backed digital currency as legal tender to help stabilize the local currency, the Zim dollar. The tokens will be a form of electronic money backed by the country’s gold reserves, which will be held by the central bank.
Stabilizing Local Currency
The RBZ wants people holding Zim dollars to be able to exchange their money for the gold-backed token so that they can hedge against the volatility of the local currency. A year ago, 1 U.S. dollar was worth about 150 Zim dollars, and it’s now worth closer 1,000 Zim dollars according to Investing.com. The country operates with both the Zim dollar and U.S dollar.
Central Bank Digital Currency
Last August, the RBZ said it planned to create a central bank digital currency (CBDC). Other African countries have also been exploring CBDCs; Nigeria launched its eNaira in October 2021.
Impact on Crypto & Web3
The introduction of this digital currency could have an effect on crypto markets and Web3 technology in Zimbabwe as well as other nations taking similar steps towards digitizing their currencies or launching CBDCs.
Conclusion
It remains unclear how exactly this new digital asset will work but it seems like it’ll provide an alternative way for people in Zimbabwe to save their wealth while hedging against volatile currencies such as Zimbabwe’s own Zim Dollar – providing more financial security for citizens across Africa and beyond!