The Reserve Bank of Zimbabwe (RBZ) has unveiled its groundbreaking initiative, a gold-backed digital token named Zimbabwe Gold (ZiG), designed to serve as a national retail payment method. The central bank has confirmed ZiG’s status as legal tender, making it mandatory for banks and businesses to accept this digital currency. Each ZiG token will be supported by gold reserves, with its value linked to the international gold price. Commercial banks are anticipated to establish dedicated ZiG accounts, similar to conventional currencies within the country.
RBZ Governor John Mangudya emphasized that ZiG’s introduction aims to expand the range of value-preserving instruments in the economy, enhance investment divisibility, and increase public accessibility and usage. Amidst economic challenges and inflation, citizens resorted to the U.S. dollar to safeguard their wealth, leading the RBZ to explore innovative solutions to address these concerns.
To counteract the dollarization trend, the RBZ initiated tests for a gold-backed digital token in April, witnessing significant adoption rates. Encouraged by the positive response, the central bank announced the launch of a retail version, akin to a central bank digital currency (CBDC). This move was perceived as an effective monetary policy tool to stabilize the domestic financial and capital markets swiftly.
However, ZiG has faced scrutiny from skeptics questioning its real-world utility, availability, and the adequacy of gold reserves. The RBZ assured the public that external auditors have been enlisted to validate ZiG’s availability for transactions and wealth preservation, ensuring transparency and credibility.
Across Africa, central banks are actively exploring the potential of central bank digital currencies (CBDCs) to enhance their local economies. While Nigeria pioneered CBDC development with the launch of the e-naira in 2021, low adoption rates have tempered initial enthusiasm among African banking regulators. Kenya’s central bank has initiated public consultations on CBDCs, recognizing the potential benefits of financial inclusion and cross-border payments. Several African nations may introduce digital versions of their national currencies before 2030, leveraging CBDCs to revolutionize their financial landscapes.