Zimbabwe has officially launched a gold-backed digital currency, despite warnings from the IMF about possible drawdown of its reserves.
In a press release on Friday, Zimbabwe’s central bank confirmed that it has earmarked 140 kilograms of its gold reserves to back its new cryptocurrency. In fact, this happened despite the warnings from the IMF about the possible reduction of its reserves.
According to John P. Mangudya, Governor of the Reserve Bank of Zimbabwe, citizens can use the token for peer-to-peer payments and transact with businesses, calling it an innovative new payment and savings option.
“The issuance of gold-backed digital tokens aims to expand the value preservation instruments available in the economy and improve the divisibility of investment instruments and broaden their access and use by the publicMangudya said.
According to the statement, the monetary authority, in its first launch, had received 135 requests worth 14 billion Zimbabwean dollars ($12 million) to buy the gold-backed digital tokens. There will be a second auction for May 18.
It should be noted that the currency that has lost more than 40% of its value against the US dollar this year, amid rising inflation. The central bank’s reference interest rates rose to 140%, the highest in the world.
The move is criticized by the IMF, which warns that it could lead to a decline in reserves.
Source: Ambito
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