The goal of this new currency is to provide investors in the country with a stable platform to save, invest and transact. Open to individuals, financial institutions, corporations and other entities, the offer allows the purchase of digital tokens backed by physical gold from commercial banks, building societies, and the People’s Own Savings Bank.
A key attribute is the low-price access point. Individuals can acquire fractions of the digital gold tokens for just 10 US dollars (the salary in Zimbabwe ranges from 170$ to 3000$ a month), while the institutional minimum is US$5000. The second character is the pricing model, based on the standard international gold price as decided by the London Bullion Market Association, which gives the currency some much-needed stability.
Although this currency was originally devised simply as a means to store savings in face of the rapid inflation rate (193% last year, that means the currency’s value got cut to almost a third of what it was at the end of 2021), the central bank has since confirmed that the tokens “will be tradable and capable of facilitating Person-to-Person and Person-to-Business transactions and settlement.”
Formal retailers currently accept the Zimbabwean dollar alongside foreign currencies in order to keep on the authorities’ right side, but that means they suffer the devaluation costs while informal traders can insist on payments in foreign currencies like the US dollar. Above-the-board companies will be looking forward to accepting these digital gold tokens because they’re local tender but should be much more stable than the Zimbabwean dollar.