The Reserve Bank of Zimbabwe’s first gold-backed cryptocurrency sale has been a success.
The Reserve Bank of Zimbabwe has sold Z$14 billion of gold-backed digital tokens – worth $39 million – despite warnings from the International Monetary Fund.
On May 12, the central bank of Zimbabwe announced that it had received 135 applications for a total of Z$14.07 billion to buy gold-backed cryptocurrency. The Zimbabwean dollar is trading at 362 Zimbabwean dollars against the United States, according to XE.com – but it is higher than on the street – which makes the reserve worth $38.9 million.
The crypto show, launched in April, is backed by 139.57 kilograms of gold, and the sale takes place from May 8 to May 12. The tokens were sold at a minimum price of $10 for individuals and $5,000 for companies and other organizations.
Minimum deposit period for tokens is 180 days and they can be held in e-gold wallet or e-gold card. The move will be part of an effort to stabilize the country’s economy and the country’s currency continues to depreciate against the greenback.
The second round of the digital token sale will take place and the bank has requested that statements be submitted this week to be settled on May 18. According to local media, RBZ Governor Dr. John Mangudya says:
“The introduction of digital tokens backed by gold aims to expand the tools of value protection in the economy and to improve the classification of investment tools and to expand the access and use of the society.”
The move follows a warning from the International Monetary Fund against African countries’ plans for gold-backed currencies, arguing that it would destabilize foreign exchange markets, according to a May report. 9 According to Bloomberg.
“Careful analysis should be carried out to ensure that the benefits of this system outweigh the potential costs and risks, including, for example, macroeconomic and financial stability risks, legal and operational risks, governance, the value of foreign currency is abandoned.” an IMF spokesman said. Bloomberg. Zimbabwe has struggled with currency reform for more than a decade.
In 2009, the country adopted the USD as its currency after a period of hyperinflation that made the country’s currency worthless. The Zimbabwean dollar was reintroduced in 2019 to revive the country’s economy, but the exchange rate changed again.
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