Zimbabwean institutions and residents can now settle or pay domestic transactions with the newly launched gold-backed digital tokens, according to the central bank. John Mangudya, the governor of the central bank, said that the bank has completed enlisting external auditors’ services to “validate the availability and adequacy of gold to ZIG at any given time.”
Gold-Backed Tokens For Preserving Value(?):
The Zimbabwean digital tokens have now been approved – these gold-backed tokens can be used for settling or paying domestic transactions. On 5th October, the Reserve Bank of Zimbabwe issued a statement. The governor of RBZ, John Mangudya, said that these tokens will continue to act as an instrument for value preservation.
The RBZ has been working to support the infrastructure for the past few months. Initially, the central bank had said that these tokens (now known as ZIG tokens) could become useful for insulating holders against currency depreciation and inflation.
Purchasing Digital Tokens With Standard Local Currency:
Meanwhile, right before launching these digital tokens, the Reserve Bank of Zimbabwe had launched physical coins for serving a similar purpose.
When asked to comment on how to determine the value of ZIG tokens, the governor said, “The value of ZIG will be at par with the value of the physical Mosi-au-Tunya gold coin and will remain informed by the international gold price. Banks will maintain dedicated ZIG accounts and intermediate transactions in ZIG in the same way they intermediate in local and foreign currency.”
The bank also mentioned that the applicable tax for money transfers would be only half the rate typically applied for any foreign currency-denominated transaction.
As per a report published in the Herald, the ZIG tokens are basically issued in units of a single milligram of gold that is worth just 6.1 cents. The report also added that both institutions and individuals can use foreign and local currency to buy the tokens.
As we mentioned in the beginning, Mangudya has also said that the Reserve Bank of Zimbabwe had actually enlisted the “services of external auditors to validate the availability and adequacy of gold to ZIG at any given time.”
This seems like an attempt to assuage skeptics since the bank has not revealed the identity of its auditors.