The Reserve Bank of Zimbabwe (RBZ) has initiated a trial phase, referred to as a “dry run,” to assess the potential launch of a gold-backed digital currency, reports indicate. Nelson Mupunga, the director of economic research at the central bank, has stated that this digital currency aims to provide an alternative to foreign currencies.
Insatiable Demand for Foreign Currency Among Local Residents
Reports suggest that the Zimbabwean central bank has begun a trial phase to evaluate the viability of introducing a gold-backed digital currency for use as a means of payment. This initiative forms part of the Reserve Bank of Zimbabwe’s efforts to stabilize the local currency.
This development follows shortly after the RBZ announced plans to launch a peer-to-peer (P2P) platform, enabling holders of digital gold tokens to engage in trading. John Mangudya, the RBZ governor, has previously emphasized that these gold-backed tokens could help mitigate the country’s persistent reliance on foreign currencies such as the U.S. dollar.
Gold-Backed Digital Currency: A Reliable Store of Value
Nelson Mupunga, the director of economic research and policy implementation at the RBZ, has highlighted that the digital currency will serve as an alternative to the U.S. dollar and other foreign currencies.
“We are currently in an advanced testing stage. Soon, the gold digital token will be available for transaction purposes, similar to purchasing foreign currency from the parallel market. However, it will also serve as a means of transacting directly. Thus, the token will fulfill the same function,” stated the RBZ official.
Mupunga further explained that the decision to launch a gold-backed digital currency stemmed from observing local residents’ tendency to favor the U.S. dollar over the struggling local currency. Consequently, instead of relying on the U.S. dollar as a store of value, individuals in the inflationary environment of Zimbabwe will have the option to utilize gold-backed digital tokens.
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Keywords: Zimbabwe, Central Bank, Gold-Backed Digital Currency, RBZ, Peer-to-Peer Platform, Foreign Currency, U.S. Dollar, Nelson Mupunga, John Mangudya, Store of Value, Inflation, Digital Tokens, Trial Phase, Feasibility Testing.