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The Reserve Bank of Zimbabwe (RBZ) has reached an advanced stage in its plans to launch a gold-backed digital currency.

This week, the central bank’s governor revealed that it had issued tokens equivalent to 325.02 kilograms of gold.

In the next phase of the project, RBZ’s digital gold tokens will be used for daily transactions.

The Reserve Bank of Zimbabwe (RBZ) has reached an advanced stage in its plans to launch a gold-backed digital currency.

The digital currency is based on the RBZ’s Gold-Backed Digital Token (GBDT) and will be backed by gold bars held by the central bank.

Reserve Bank of Zimbabwe steps up digital gold project

The GBDT was first announced in April as a way to help stabilize the Zimbabwean dollar. It is also seen as a way for Zimbabweans to protect against years of high inflation.

Central bank governor John Mangudya revealed during the monetary policy statement on Wednesday (August 9) that the central bank had issued GBDT 11 times as of July 21. He noted that the bank received 590 applications to purchase the tokens, equivalent to 325.02 kilograms of gold.

From gold-backed tokens to CBDCs

Looking ahead, Mangudya said:

“The bank is in the advanced stages of preparations for the final launch of the second phase of the GBDT project for trading purposes, with the ticker or name ZiG, which stands for Zimbabwe Gold.”

He added that trading in Zimbabwe’s digital gold token would complement the U.S. dollar in domestic transactions.

By transforming GBDT from a pure store of value to a currency used for everyday transactions, the RBZ is essentially proposing that these tokens be used as a CBDC.

However, the key difference between GBDTs and most CBDCs is that few currency-issuing central banks maintain gold reserves at a level close to equal to the value of currency in circulation.

The political and economic appeal of GBDT

Gold’s growing importance as a monetary policy tool in underpinning Zimbabwe’s financial system dates back to the days when the central bank adhered to the gold standard.

Additionally, the country’s foray into digital gold has stoked growing interest in the concept among critics of fiat currency.

In the U.S., for example, the arguments for GBDTs are increasingly intertwined with those against CBDCs. Both are based on a general suspicion that the Federal Reserve concentrates too much power.

It’s no coincidence that Republican lawmakers are taking the lead in banning CBDCs in Florida and launching GBDTs in Texas. After all, criticism of the Fed from across the Republican Party has grown in recent years.

Ultimately, both anti-CBDC policies and digital gold initiatives preserve the economic autonomy of states. As such, they appeal to supporters of de-federalization who oppose what they see as overly centralized fiscal management. #津巴布韦  #数字货币