The Reserve Bank of Zimbabwe (RBZ) has officially launched Zimbabwe Gold (ZiG), a gold-backed digital token, as a payment method. Introduced in April 2023, each ZiG token is backed by a physical amount of gold held in the bank's reserves. The initiative aims to encourage local investors to prioritize national assets over the United States dollar in a country facing triple-digit inflation. ZiG tokens can be stored in e-gold wallets or e-gold cards, facilitating peer-to-peer and business transactions.
Zimbabwe Gold (ZiG), Gold-Backed Digital Token, Officially Launches as a Payment Method
The Reserve Bank of Zimbabwe (RBZ) has officially launched Zimbabwe Gold (ZiG), a gold-backed digital token, as a payment method. Introduced in April 2023, each ZiG token is backed by a physical amount of gold held in the bank's reserves. The initiative aims to encourage local investors to prioritize national assets over the United States dollar in a country facing triple-digit inflation. ZiG tokens can be stored in e-gold wallets or e-gold cards, facilitating peer-to-peer and business transactions.
RBZ Governor John Mangudya stated that the issuance of gold-backed digital tokens is intended to expand the value-preserving instruments available in the economy, enhance the divisibility of investment instruments, and widen their access and usage by the public. The digital tokens are designed to provide an alternative to the U.S. dollar.
ZiG tokens are tradeable for peer-to-peer and business transactions, offering a digital representation of physical gold reserves. The RBZ reported various price levels for ZiG, depending on the weight of its gold reserve. For example, investors can buy 1 ounce of ZiG for $1,910 and 0.1 ounce for $191. Investors purchased the equivalent of 17.65 kilograms of ZiG on Sept. 28, paying with Zimbabwean and U.S. dollars. The total amount of ZiG sold since previous rounds of digital token sales stands at around 350 kg of gold.
Zimbabwe has faced currency instability and rising inflation for more than a decade. In 2009, the nation adopted the U.S. dollar as its official currency in response to hyperinflation. In 2019, Zimbabwe reintroduced its own currency in an attempt to revitalize the economy, but currency volatility persisted. The introduction of gold-backed digital tokens is part of efforts to address economic challenges and provide alternative investment instruments.
(DAVID ATTLEE, COINTELEGRAPH, 2023)