Zimbabwe Central Bank Plans To Launch Gold-Based Digital Token For Retail Use

Gold coin illustration. (photo: Doc. Pixabay)

The Zimbabwe Central Bank (RBZ) plans to immediately launch a gold-based digital token (GBDT) for retail use, as announced by RBZ. This step follows the success of the token among investors, which the bank calls a "promand" in the latest report.

RBZ announced the introduction of the GBDT in April and has carried out 11 issuances representing 325 kilograms (716.5 pounds) of gold on July 21, according to a mid-term financial report released by the bank on August 9. These tokens are guaranteed by physical gold held by RBZ.

Now, GBDT "will be increased for use in transactions by the public."

"This bank is in the advanced stages in preparation to launch a GBDT for transactional purposes in Phase II of the project. [...] It is hoped that the transactional phase will see GBDT [complementing] demand for the US dollar in domestic transactions because retailers will be offered safer, more convenient, and value-preserving exchange facilities," said RBZ.

The GBDT issuance comes after RBZ started publishing physical gold coins last year. The coins were quickly sold out by investors, and only 2% of them have been redeemed, RBZ said. GBDT offers higher share and security gains, the bank claims.

Inflation in Zimbabwe reached 175.8% in June after banks adopted a new benchmark index. RBZ set an interest rate of 150% in that month. The US dollar is widely used in local trade.

RBZ has been working on a central bank digital currency (CBDC) since July 2022 and said that its progress is stable. The bank conducted a survey that found that 71.7% of respondents were willing to use it. GBDT will "be the basis for development" of the CBDC, because it "has most of the characteristics of the CBDC.