- Reserve Bank spent 140 kg of gold to secure coins
- And announced a new token sale
- IMF warns it is a direct threat to the state’s coffers
Zimbabwe spent about 140 kg of gold reserves to secure and conduct its first digital money sale. The project is designed to reduce the African country’s dollar dependence.
The central bank reported that it had received 135 applications to buy tokens backed by gold. They totaled 14 billion Zimbabwean dollars ($12 million).
Authorities are not stopping and are preparing a second auction for May 18.
Criticism of the IMF
The International Monetary Fund (IMF) has harshly criticized the actions of Zimbabwe. They fear that such sales deplete the country’s foreign exchange reserves.
IMF authorities carefully compare the benefits and risks of a digital currency backed by gold.
“Instead of rushing to issue “gold” tokens, local officials should consider liberalizing the country’s currency market.”
The Zimbabwean dollar has halved in value in the past year. The central bank decided to respond by raising the interest rate and selling gold from the treasury.
They issued both physical and tokenized gold coins. Both assets, according to the central bank, will serve as an alternative means of saving.
High inflation is now also being fought by Argentina. But they decided, on the contrary, to tighten control over cryptocurrency transactions.