The Reserve Bank of Zimbabwe (RBZ) has announced plans to introduce a novel gold-backed government cryptocurrency (CBDC) in a bid to stabilize the local currency.
RBZ Governor Rjon Mangudiya has confirmed that the CBDC will be recognized as legal tender.
By launching a digital currency linked to Zimbabwe’s gold reserves, the Central Bank aims to leverage the country’s vast gold reserves to bolster the faltering Zimbabwean dollar and tackle inflation.
The move to introduce CBDCs is expected to help those holding funds in Zimbabwean dollars to exchange their currency for digital assets, thereby safeguarding their value and providing a hedge against exchange rate volatility.
The Zimbabwean finance department has noted that its intention to incorporate digital assets has been influenced by the success stories of other African nations.
In a recent statement, Governor of the Central Bank of Nigeria, Godwin Emefiele, disclosed that the volume of transactions involving the local state digital currency had surged by 63% since its launch, hitting $47.7 million.
The Zambian Minister of Science and Technology, Felix Mutati, had earlier observed that digital assets were fast gaining acceptance for everyday transactions.
The popularity of Bitcoin and Ethereum has already prompted the government to draft new regulations for their control.