Zimbabwe’s central bank has announced pricing details for its upcoming gold-backed digital tokens. Set to launch on May 8, the tokens will be available at a minimum price of $10 for individuals and $5,000 for corporations and other entities.
According to the Reserve Bank of Zimbabwe, the gold-backed digital currency tokens will be sold in U.S. dollars and local currency. A 20% margin above the willing-buyer willing-seller interbank mid-rate will be applied when purchasing in local currency. The sale is set to close on May 10.
The willing-buyer willing-seller interbank mid-rate is an exchange rate at which banks buy and sell currencies to each other. This midpoint rate is determined by market factors such as supply and demand and is commonly used as a benchmark for financial transactions and exchange rates quoted by banks and financial institutions.
Efforts to strengthen the local currency
On April 28, the Reserve Bank of Zimbabwe announced its plans to introduce a gold-backed digital currency to serve as legal tender in the country. This move is part of the nation’s efforts to support its local currency, which has weakened by 37% against the U.S. dollar on the official market this year.
The Monetary Policy Committee approved the plan in March after introducing gold coins as a store of value to support the local unit eight months prior.
Zimbabwe has faced currency instability and high inflation rates for over a decade. After a period of hyperinflation, the country adopted the U.S. dollar in 2009, reintroducing the Zimbabwean dollar in 2019 to revive the economy.
However, in 2022, the government reverted to using the U.S. dollar to control rising prices.
