The Reserve Bank of Zimbabwe (RBZ) introduced a gold-backed digital currency to serve as legal tender in the country on April 28 2023.
The introduction of digital tokens was the latest move by the southern African nation to support its own local currency, which has weakened 37% against the U.S. dollar on the official market this year, according to Bloomberg.
At inception, the tokens were sold at a minimum price of $10 for individuals and $5,000 for corporations and other entities.
According to a statement released by the RBZ on May 4, 2023 the gold-backed digital currency tokens would be sold in U.S. dollars and local currency.
However, the local currency price would have a 20% margin above the willing-buyer willing-seller interbank mid-rate.
The willing-buyer willing-seller interbank mid-rate is the exchange rate at which banks are willing to buy and sell currencies to each other.
It is considered the “midpoint” between the buying and selling rates determined by prevailing market conditions such as supply and demand.
This rate is used as a benchmark for many financial transactions, and is often used as a reference rate for exchange rates quoted by banks and financial institutions.
Zimbabwe has been battling currency instability and high inflation rates for over ten years. After a period of hyperinflation, the country adopted the U.S. dollar in 2009.
In an attempt to revive the struggling economy, the Zimbabwean dollar was reintroduced in 2019. However, in 2022, the government reverted back to using the U.S. dollar to control rising prices.
Below is the latest prices for gold coins and digital tokens:
Zwnews/ Cointelegraph
