On October 5th, a gold-backed digital token called Zimbabwe Gold (ZiG) was officially introduced as a method of payment. This announcement was made by the Reserve Bank of Zimbabwe (RBZ).
RBZ initiated its new project in April 2023, emphasizing that every digital token issued would be backed by a quantity of physical gold held in the bank’s reserves. RBZ began issuing gold-backed tokens in 2022, claiming they have been successfully implemented.
The mission behind both physical gold and the newly introduced ZiG is to persuade investors to put their money into a national asset rather than the US dollar, which is not an easy task in a country with triple-digit inflation. RBZ Governor John Mangudya stated, “The issuance of gold-backed digital tokens is aimed at expanding the value preservation tools available in the economy and enhancing the divisibility of investment instruments, as well as expanding public access and utilization.”
The digital tokens can be stored in electronic gold wallets or gold cards and can be used for business transactions and peer-to-peer exchanges.
RBZ has reported various price levels for ZiG depending on the weight of the gold reserve. For instance, 1 ounce of ZiG can be purchased for $1,910 USD, and 0.1 ounce for $191 USD. According to the bank, as of September 28th, investors had bought approximately 17.65 kilograms (kg) worth of ZiG, paying in both Zimbabwean dollars and US dollars. The total ZiG sold from previous digital token sales rounds is approximately 350 kg of gold.
Zimbabwe has struggled with currency instability and rising inflation for over a decade. In 2009, the country officially adopted the US dollar as its primary currency to combat hyperinflation, rendering its domestic currency virtually worthless. In an effort to revive the domestic economy, Zimbabwe reintroduced its own currency in 2019. However, this move was followed by currency fluctuations.