- August 15, 2023
- Posted by: [email protected]
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The Reserve Bank of Zimbabwe (RBZ) is on the cusp of introducing its gold-backed digital token (GBDT) for retail use, following the token’s successful reception among investors. The RBZ’s plan to leverage digital gold tokens as a financial instrument comes as a welcome development in a country grappling with triple-digit inflation.
The GBDT initiative was initially unveiled in April and has since gained traction, with the bank reporting commendable investor interest in a recent report. The RBZ’s approach involves linking the digital tokens to physical gold reserves held by the bank, offering a novel way to back a digital currency with tangible assets.
According to the mid-term financial report released on August 9, the RBZ had already carried out 11 issuances, equivalent to 325 kilograms (716.5 pounds) of gold, by July 21. With these early successes in mind, the bank is now poised to advance into the next phase of the project, targeting transactional use by the general public.
The RBZ outlined its plan for Phase II, highlighting that the GBDTs will complement the demand for the US dollar in domestic transactions, providing a secure, convenient, and value-retaining medium of exchange for retailers. The tokens are touted to offer benefits such as divisibility and heightened security compared to their physical counterparts.
The GBDT initiative builds on the RBZ’s earlier introduction of physical gold coins, which garnered significant investor attention. The digital tokens aim to enhance the advantages of divisibility and security while adding the innovative dimension of digital transactional utility.
Zimbabwe has been grappling with soaring inflation rates, with June’s figures reaching 175.8% after the adoption of a new benchmarking index. Amid this economic backdrop, the introduction of gold-backed digital tokens holds the potential to provide a more stable and reliable means of conducting transactions, especially considering the heavy reliance on the US dollar in local trade.
As the RBZ moves forward with its plans to introduce GBDTs into retail transactions, it’s clear that the integration of blockchain and tangible asset-backed digital tokens could have a meaningful impact on the country’s financial landscape.
