The Reserve Bank of Zimbabwe (RBZ) has taken a significant step towards addressing the nation’s enduring currency instability and rampant inflation by launching the Zimbabwe Gold (ZiG) digital token. This innovative initiative, introduced in April 2023, is grounded in physical gold reserves safeguarded by the central bank.
Zimbabwe’s financial landscape has been marked by turbulence, with the local currency losing its value dramatically in the past. Following a period of hyperinflation that rendered the local currency almost worthless in 2009, Zimbabwe adopted the US dollar as its official currency. However, in 2019, the nation reintroduced its own currency, leading to renewed currency volatility.
ZiG, the newly introduced digital token, is underpinned by tangible gold reserves held in the RBZ. Its primary purpose is to offer a stable and valuable investment avenue for local investors, encouraging them to shift focus from the US dollar to national assets. ZiG tokens, ranging in weight from 0.1 ounce to 1 ounce, are stored in e-gold wallets or e-gold cards, presenting a user-friendly and versatile payment method for individuals. These tokens can be utilized for various transactions, both peer-to-peer and in business settings.
Since its introduction, ZiG has garnered significant investor interest, with individuals purchasing the equivalent of 17.65 kilograms of gold in ZiG as of September 28, 2023. This uptake represents a notable shift from the US dollar, with approximately 350 kilograms of gold sold through this innovative digital token.
The introduction of gold-backed digital tokens serves to diversify the range of value-preserving instruments available in the Zimbabwean economy. It enhances the divisibility of investment options and promotes accessibility for the general public, aiming to create a more stable economic environment for the nation.