Zimbabwe Dollar Replaced by Gold-Backed Token

The Reserve Bank of Zimbabwe has recently launched the Zimbabwe Gold (ZiG) currency in both paper and coin form. This new currency replaces the Zimbabwean dollar and is supported by a mix of gold and foreign currencies. After being introduced as a digital payment method in October, physical distribution of the ZiG began on April 29th. All banks in the country received their supply by the end of that day. The official exchange rate was set at 13.56 ZiG to the U.S. dollar.

The ZiG currency was initially introduced digitally on April 2nd, with its value tied to the price of gold. The transition to this new form of currency caused chaos in the local stock market. To ensure the utilization of the ZiG, businesses are now required to pay at least 50% of their taxes using it. The central bank set the interest rate for this currency at 20%, a significant decrease from the previous rate of 130%.

John Mushayavanhu, the newly appointed governor of the central bank, anticipated a reduction in Zimbabwe’s inflation rate from 55% to just 2% annually with the implementation of the ZiG. Presently, over 80% of transactions in the country are conducted using U.S. dollars, as the Zimbabwean dollar has experienced a drastic 75% decline in value within the current year alone.

The ZiG currency is backed by a combination of 2.5 tons of gold and $100 million in foreign currency reserves, resulting in a total value of $285 million. This amount is three times the value of the ZiGs that are being issued. Mushayavanhu emphasized during a press conference on April 5th that they aim to establish a solid and stable national currency, avoiding the detrimental practice of excessive money printing.

In 2023, Zimbabwe was ranked third in Africa for cryptocurrency usage. When the plan for the gold-backed ZiG was announced in April 2023, the International Monetary Fund disagreed with its introduction.

4 thoughts on “Zimbabwe Dollar Replaced by Gold-Backed Token

  1. I don’t trust this new governor, John Mushayavanhu. He’s just making empty promises to save face. 😒

  2. The Zimbabwean dollar has already lost so much value, can we really trust this new currency?

  3. The ZiG currency is a game-changer for Zimbabwe! It will help reduce inflation and restore faith in the financial system. Well done, Reserve Bank of Zimbabwe! 💰✨

  4. I’m thrilled to hear that the ZiG currency is backed by gold and foreign currency reserves! This instills confidence and trust in its value.

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