According to reports, the Reserve Bank of Zimbabwe has commenced a trial, referred to as a “dry run,” to assess the feasibility of introducing a digital currency backed by gold. Nelson Mupunga, the director of economic research at the central bank, stated that the digital currency aims to provide an alternative to foreign currencies.
Satisfying the Local Demand for Stable Currency
A recent report indicates that the central bank of Zimbabwe has initiated a “dry run” to evaluate the viability of issuing a gold-backed digital currency intended for use as a means of payment. The digital currency will be recognized as legal tender for peer-to-peer transactions, forming part of the Reserve Bank of Zimbabwe’s comprehensive measures to stabilize the local currency.
The recent disclosure from an official of the Zimbabwean central bank follows their earlier announcement of plans to launch a peer-to-peer platform. This platform will enable the trading of digital gold tokens, as reported by CryptokenTop.com News. The governor of the Reserve Bank of Zimbabwe, John Mangudya, previously mentioned that these gold-backed tokens will help address the country’s ongoing dependence on foreign currencies such as the U.S. dollar.
Gold-Backed Digital Currency as a Secure Asset
Nelson Mupunga, the director of economic research and policy implementation at the Reserve Bank of Zimbabwe, explained that the digital currency will serve as an alternative to foreign currencies like the greenback.
“We are currently in an advanced stage, testing the digital currency. Soon, we will allow the gold digital token to be used for transactions, just like individuals buy foreign currency from the parallel market. However, the token will also serve as a means of transaction. Therefore, it fulfills the same function,” stated the RBZ official.
The official further mentioned that the central bank opted to introduce the gold-backed digital currency due to the observed trend of local residents abandoning the struggling local currency in favor of the greenback. Consequently, instead of utilizing the greenback for storing value, residents in the country affected by inflation will have the option to use gold-backed digital tokens.
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Frequently Asked Questions (FAQs) about gold-backed digital currency
What is the purpose of the gold-backed digital currency being tested by the Reserve Bank of Zimbabwe?
The purpose of testing the gold-backed digital currency is to provide an alternative to foreign currencies and stabilize the local economy in Zimbabwe.
How will the gold-backed digital currency be used?
The gold-backed digital currency will be accepted as legal tender for peer-to-peer transactions, allowing individuals to use it for various payment purposes.
Why is the Reserve Bank of Zimbabwe launching a gold-backed digital currency?
The central bank aims to address the high demand for foreign currencies, particularly the U.S. dollar, by offering a secure and stable digital currency option backed by gold.
How will the gold-backed digital currency benefit residents of Zimbabwe?
Residents of Zimbabwe will have the opportunity to store value using the gold-backed digital tokens instead of relying solely on foreign currencies, providing a more reliable and secure asset.
Is the gold-backed digital currency part of broader measures to stabilize the local currency?
Yes, the introduction of the gold-backed digital currency is one of the measures implemented by the Reserve Bank of Zimbabwe to stabilize the local currency and promote economic stability.
More about gold-backed digital currency
- Reserve Bank of Zimbabwe
- CryptokenTop.com News
- Gold-backed digital currencies
- Zimbabwe’s currency challenges