The Reserve Bank of Zimbabwe (RBZ) has almost completed its visionary move to launch a gold-backed digital currency. The effort stems from the foundation laid by the RBZ’s Gold-Backed Digital Token (GBDT).

Committed to Zimbabwe's economic stability

The cornerstone of the digital currency will be gold bars, which will be safely stored within the central bank. This strategic move by the RBZ, announced in April, has two purposes:

1. Supporting the Zimbabwean dollar: By pegging the digital currency to tangible assets such as gold, the RBZ aims to strengthen and stabilize the country’s currency.

2. Inflation Hedge for Citizens: As inflation continues to soar, this move provides Zimbabweans with a solid buffer against rising prices.

In his latest monetary policy disclosure on August 9, RBZ Governor John Mangudya shared some interesting details. As of July 21, the number of GBDT issuances stood at 11, and the number of applications stood at 590. These applications represent a collective intent to acquire tokens equivalent to 325.02 kg of gold.

Governor Mangudya spelled out the next steps: "The Central Bank's progress is commendable. We are preparing for the second phase of the GBDT, which is known as ZiG - short for Zimbabwe Gold."

At this stage, Zimbabwe’s digital gold tokens will be more than just an investment or store of value. They are poised to take on everyday transactions, paralleling the role of the U.S. dollar in local transactions.

GBDT: A unique CBDC variant

The shift in the role of GBDT reflects a broader global trend towards central bank digital currencies (CBDCs). However, one notable factor remains: the gold-backed nature of GBDT. Globally, few central banks maintain gold reserves that nearly match the circulating value of their currencies.

Zimbabwe’s increasing reliance on gold to underpin its financial framework is reminiscent of a bygone era. More specifically, the golden age when central banks religiously adhered to the gold standard.

In its recommitment to the gold standard, Zimbabwe has charted a course toward financial stability and security for its citizens. With the world watching, the success of this initiative could inspire a global rethinking of digital currencies and their tangible underpinnings. #津巴布韦 #数字货币