Zimbabwe's ZiG gold-backed token now officially accepted as a payment method
Tue Oct 10 2023
The Reserve Bank of Zimbabwe (RBZ) has announced that its Zimbabwe Gold (ZiG) gold-backed digital token is now officially endorsed as a payment method in the country.
According to a press release from the RBZ, the gold-backed token officially became an accepted payment method on October 5 and can be used to complete domestic transactions, “over and above its value-preservation purpose,” they said.
“The value of ZiG will be at par with the value of the physical Mosi-oa-Tunya gold coin and will remain informed by the international gold price,” RBZ said. “Banks will maintain dedicated ZiG accounts and intermediate transactions in ZiG in the same way they intermediate transactions in local and foreign currency.”
The RBZ added that “The applicable intermediated money transfer tax (IMTT) will be half of the IMTT applicable to transactions in foreign currency and the relevant legal instrument to that effect will soon be published.”
External auditors have been hired by the RBZ to “validate the availability and adequacy of gold to back ZiG at any given time,” they said.
The RBZ first introduced its gold-backed token project in April, specifying that every digital token issued would be backed by the equivalent physical amount of gold held in the bank’s reserves. The launch of a digital version followed the issuance of physical gold tokens in 2022, which the RBZ says was successfully adopted.
The intent behind releasing both the physical and digital gold tokens was to persuade local investors to put their money into a national asset as opposed to U.S. dollars amid triple-digit inflation.
“The issuance of the gold-backed digital tokens is meant to expand the value-preserving instruments available in the economy and enhance divisibility of the investment instruments and widen their access and usage by the public,” said Dr. John Mangudya, Governor of the RBZ.
Based on the data provided by the RBZ on Friday, the going rate for the gold-backed token was $0.0614 per milligram, which meant citizens were able to purchase 1 ounce of ZiG for $1,910 and 0.1 ounce for $191.
All ZiG tokens must be stored in either e-gold wallets or e-gold cards and are tradeable for both person-to-person (P2P) and business transactions.
According to a separate release from the RBZ, a total of 17.65 kg worth of ZiG was purchased by 16 investors during the sixteenth token issuance, which took place on September 28. All but 0.129 kg was purchased using Zimbabwean dollars.
Including that issuance, the RBZ said it has sold a total of 350 kg worth of ZiG tokens. The next issuance is scheduled for Thursday.
Source: https://www.kitco.com/