Zimbabwe central bank close to introducing gold-backed digital tokens into retail

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The Reserve Financial institution of Zimbabwe (RBZ) expects to launch its gold-backed digital token (GBDT) for retail use quickly, the RBZ has said. This follows the token’s success with traders, which the financial institution described as “commendable” in a current report.

The RBZ announced the introduction of the GBDT in April and had performed 11 issuances representing 325 kg. of gold by July 21, in keeping with a mid-term monetary report the financial institution released on Aug. 9. The tokens are backed by bodily gold held by the RBZ.

Now the GBDT “shall be scaled up for use for transactional functions by the general public.” The RBZ stated:

“The Financial institution is at a sophisticated stage in preparations for the rolling out of GBDTs for transactional functions in Section II of the mission. […] It’s envisaged that the transactional part will see GBDTs complimenting [sic] the demand for the US greenback in home transactions as retailers shall be supplied a safer, extra handy, and value-preserving medium of trade.”

The GBDT issuance got here after the RBZ started issuing bodily gold cash final yr. These have been snatched up by traders and solely 2% of them have been redeemed, the RBZ stated. The GBDT affords some great benefits of divisibility and elevated safety, the financial institution claimed.

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Inflation in Zimbabwe reached 175.8% in June after the financial institution adopted a brand new benchmarking index. The RBZ set its rate of interest at 150% that month. The U.S. greenback is closely utilized in native commerce.

Annual inflation in Zimbabwe. Supply RBZ/ZIMSTAT

The RBZ has been pursuing a central financial institution digital foreign money (CBDC) since July 2022 and stated it’s making regular progress. It performed a survey that discovered 71.7% of respondents could be prepared to make use of it. The GBDT would “kind the idea for the event” of a CBDC because it “reveals many of the traits of a CBDC.”

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