The Reserve Bank of Zimbabwe (RBZ) has officially recognized gold-backed digital tokens as a legitimate method for conducting domestic transactions. According to the RBZ governor, John Mangudya, the central bank has taken steps to ensure the credibility of these tokens by enlisting external auditors to regularly assess the availability and sufficiency of gold backing the tokens, known as ZIG tokens.
The ZIG tokens not only serve as a means of payment but also function as a store of value, aiming to protect users against inflation and currency devaluation. The RBZ has been diligently working on establishing the necessary infrastructure to support these tokens over the past few months.
To determine the value of ZIG tokens, they will be pegged to the value of the physical Mosi-au-Tunya gold coin and will be influenced by international gold prices. Banks are expected to maintain dedicated ZIG accounts and handle transactions in ZIG much like they do with local and foreign currencies. Moreover, the RBZ has implemented a reduced money transfer tax rate for ZIG transactions compared to foreign currency transactions.
The report highlights that ZIG tokens are issued in small units of one milligram of gold, equivalent to just over 6.1 cents. Both individuals and institutions can acquire these tokens using local and foreign currencies.
In an effort to provide transparency and alleviate doubts, Governor Mangudya mentioned the engagement of external auditors to verify the gold reserves supporting ZIG tokens. However, the specific names of these auditors were not disclosed in the central bank’s statement.
This development represents a significant step in Zimbabwe’s financial landscape, offering an innovative and potentially stable digital asset for transactions and value preservation. The success of ZIG tokens will likely depend on their ability to maintain the promised link to physical gold and their reception within the local and international financial markets.
Frequently Asked Questions (FAQs) about gold-backed ZIG tokens
What are ZIG tokens, and why are they significant?
ZIG tokens are digital tokens backed by physical gold, approved by the Zimbabwean Central Bank. They serve as a method for domestic transactions and a store of value, offering a hedge against inflation and currency devaluation.
How is the value of ZIG tokens determined?
The value of ZIG tokens is tied to the value of the physical Mosi-au-Tunya gold coin and is influenced by international gold prices. This ensures that the tokens maintain their value over time.
How can individuals and institutions acquire ZIG tokens?
Both individuals and institutions can purchase ZIG tokens using local and foreign currency, making them accessible to a wide range of users.
What is the role of external auditors in the ZIG token ecosystem?
External auditors are engaged by the Reserve Bank of Zimbabwe to validate the availability and sufficiency of gold backing the ZIG tokens, enhancing transparency and credibility.
How do ZIG tokens impact transaction costs?
ZIG token transactions incur a reduced money transfer tax rate compared to foreign currency transactions, potentially reducing transaction costs for users.
What does this development mean for Zimbabwe’s financial landscape?
The approval of gold-backed ZIG tokens represents a significant step in Zimbabwe’s financial evolution, offering an innovative and stable digital asset for transactions and value preservation. It has the potential to reshape how financial transactions are conducted in the country.
More about gold-backed ZIG tokens
- Zimbabwean Central Bank Official Statement
- ZIG Tokens Explained
- Zimbabwe’s Gold Coin – Mosi-au-Tunya
- External Auditing Services