The Reserve Bank of Zimbabwe’s initial gold-backed cryptocurrency sale has been a success. 

The Reserve Bank of Zimbabwe has sold 14 billion Zimbabwean dollars value of gold-backed digital tokens valued at around $39 million — despite a warning from the International Monetary Fund.

On May 12, the central bank of Zimbabwe published that it had received 135 applications for a whole of 14.07 billion Zimbabwean dollars to buy the gold-backed cryptocurrency.

The Zimbabwean dollar is officially trading at 362 Zimbabwean dollars to one United States, according to XE.com but broadly higher on the street — making the stash nominally valued at around $38.9 million. 

The crypto tokens, initially presented in April, are backed by 139.57 kilograms of gold, with the sale running from May 8 to May 12.

The tokens were sold at a minimum price of $10 for individuals and $5,000 for corporations and different entities. The minimum vesting period for the tokens is 180 days, and they can be held in e-gold wallets or on e-gold cards.

The shift is reportedly part of an effort to stabilize the country’s economy and the remained depreciation of the local currency against the greenback.

An alternate round of digital token deals will be held and the bank has requested applications be submitted this week to be settled by May 18. According to local media, RBZ Governor Dr. John Mangudya commented:

“The issuance of the gold-backed digital tokens is meant to expand the value-preserving instruments available in the economy and enhance divisibility of the investment instruments and widen their access and usage by the public.”

The shift follows a caution from the International Monetary Fund against the African nation's plan for the gold-backed currency, arguing it should rather liberalize its foreign-exchange market, according to a May 9 report.

“ A careful evaluation should be conducted to ensure the advantages from this measure outweigh the expenses and potential threats including, for instance, macroeconomic and financial stability threats, legal and operational threats, governance threats, cost of forgone FX reserves, ” an IMF spokesperson reported.

Related: Zimbabwe’s central bank to publish gold-backed digital currency: Report

Zimbabwe has been competing with currency volatility and inflation for over a decade. In 2009, the country embraced the USD as its currency following a period of hyperinflation rendering the local currency valueless.

The Zimbabwe dollar was reacquainted in 2019 to revive the local economy, but volatility ensued again.

(MARTIN YOUNG, Cointelegraph, 2023)