Zimbabwe’s First Sale of Gold-Backed Cryptocurrency Signals Economic Stability

The Reserve Bank of Zimbabwe (RBZ) has successfully conducted its inaugural sale of gold-backed digital assets, valued at approximately 14 billion Zimbabwean dollars (around $39 million).

The objective of this initiative is to bolster the country’s economy and enhance public access to investment opportunities.

During a five-day period from May 8 to 12, the RBZ achieved a significant milestone by selling 14.07 billion Zimbabwean dollars worth of digital assets supported by gold. Local media outlets reported this accomplishment.

A total of 135 applications were received from individuals and companies alike, with a minimum purchase price set at $10 for individuals and $5,000 for corporations and other organizations. To ensure stability and discourage short-term speculation, a minimum vesting period of 180 days was imposed for the tokens. John Mangudya, the Governor of the RBZ, expressed satisfaction with the high investor interest demonstrated during this initial sale.

The RBZ announced its plans to introduce a gold-backed digital currency in April of this year, with the crypto tokens backed by 139.57 kilograms of gold.

This strategic move is part of the RBZ’s broader efforts to stabilize Zimbabwe’s economy, which has been grappling with inflation and the volatility of the local currency. Following a period of hyperinflation, the Zimbabwean authorities officially adopted the U.S. dollar as the country’s currency in 2009.

However, economic challenges persisted. In an attempt to revive the economy, the Zimbabwean dollar was reintroduced in 2019, but its credibility suffered due to substantial depreciation.

Undeterred, the RBZ has expressed its commitment to continue issuing gold-backed digital assets. The second round of token sales is scheduled for May 18, with the bank already accepting applications for consideration.

It is important to note that the International Monetary Fund (IMF) has raised concerns about the Zimbabwean government’s intention to employ a gold-backed digital currency as a solution to macroeconomic issues, emphasizing the need for a thorough risk assessment. Previously, the RBZ had also explored the possibility of utilizing central bank digital currencies (CBDCs).