On 5 October, Zimbabwe introduced Zimbabwe Gold (ZiG), a gold-backed digital token, as a new payment option.

Zimbabwe Gold (ZiG)

This gold-back digital token is primarily measured in milligrams and serves as a means of exchange for both individuals and businesses, as sanctioned by the nation's central bank.

These tokens can be obtained through banks in ZiG and are available for purchase in both U.S. dollars and the local currency.

Bank customers can employ their ZiG accounts for various transactions, including making purchases at point-of-sale terminals and facilitating online payments.

This initiative was revealed by the Reserve Bank of Zimbabwe (RBZ), which unveiled the project in April 2023.

The RBZ's unique feature is that every digital token it issues is backed by a corresponding physical amount of gold held in the bank's reserves.

This approach has proven successful since the introduction of physical gold-backed tokens in 2022.

Zibabwe Currency Crisis

Zimbabwe has long grappled with a currency crisis, marked by currency instability and soaring inflation.

In an effort to stabilise the economy, Zibabwe abandoned its local currency in 2019 and adopted the US dollar.

Zimbabwe reintroduced its own currency in 2019 with the hope of stimulating economic growth; however, this step resulted in renewed currency volatility and exacerbated financial challenges.

To address these issues, the Reserve Bank of Zimbabwe (RBZ) introduced Zimbabwe Gold (ZiG), a gold-backed digital token, in a bid to encourage local investors to diversify their holdings and reduce reliance on the U.S. dollar, which has been a challenge in a country grappling with triple-digit inflation.

Reserve Bank of Zimbabwe Governor John Mangudya stated:

“The issuance of the gold-backed digital tokens is meant to expand the value-preserving instruments available in the economy and enhance divisibility of the investment instruments and widen their access and usage by the public.”

ZiG is designed to provide a secure and stable option for economic transactions and investment in a nation that has experienced currency instability and rising inflation for many years.