Zimbabwe is looking to use gold-backed crypto tokens to bail out the country’s economy.
The Reserve Bank of Zimbabwe has halted any potential fallout by selling gold-backed digital tokens worth 14 billion Zimbabwean dollars ($39 million). This is despite earlier warnings from the International Monetary Fund (IMF) not to go ahead with it. plans, At the time, the international body warned about the potential risks of the plan, suggesting that Zimbabwe would be better off liberalizing its foreign exchange market.
As of May 12, Zimbabwe’s top bank confirmed it had received 135 applications for a gold-backed cryptocurrency. Friday’s announcement also noted that, in total, it earned a total of 14.07 billion Zimbabwean dollars from the sale.
Recall that Zimbabwe introduced crypto tokens for the first time last month, noting that they are backed by 139.57 kg of gold. After this it started the sale on 8th May and let it run till 12th May. And while it sold the tokens for a minimum price of $10 to individuals, corporate entities bought them for $5,000.
As it turns out, Zimbabwe is currently planning another round of sales for the digital token. According to the central bank, interested buyers can submit their applications between now and May 18.
Reserve Bank of Zimbabwe aims to use gold-backed token to improve economy
Like most countries around the world, Zimbabwe is currently facing turbulent times in its economy. Furthermore, its local currency has been steadily depreciating against the US dollar. Hence, the reason is to use gold-backed crypto tokens to salvage the country’s economic situation.
Gold-backed digital tokens offer Zimbabweans more options to retain value, says RBZ Governor Dr. John Mangudia, according to a local news report from the Herald. Mangudiya too Claim that the tokens would “increase the divisibility of investment instruments and enhance their access and use by the public”.
For what it’s worth, it appears that Zimbabwe has carried out the due diligence previously recommended by the IMF. That is, the African nation has determined that the benefits of its gold-backed token scheme outweigh the costs and potential risks.
Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his writing style. He firmly believes in the potential of digital assets and takes every opportunity to reiterate this. He is also an avid reader, a researcher, an astute speaker and a budding entrepreneur. Although away from crypto, Mayowa’s distractions include discussing soccer or world politics.
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