Blockchain & Crypto

Zimbabwe Unveils Gold-Backed CBDC

Zimbabwe has presented a digital currency that is backed by gold.

Zimbabwe Unveils Gold-Backed CBDC

Source: Pixabay.com

Currently, this country is actively fighting the inflationary crisis. The Central Bank of Zimbabwe said in a statement that the tokens will expand the value-saving tools that are available in the economy.

The digital currency is a measure to combat the negative consequences of the sharp fall in the value of the Zimbabwean dollar. The value of this currency has decreased by more than half since the end of last year, to about 2,200 against the US dollar.

The Reserve Bank of Zimbabwe states that digital tokens are backed by gold in its reserves and can be redeemed at world prices in 180 days. Analysts believe that these actions of financial structures are a distraction from the main causes of currency problems.

Economist Tinashe Murapata says that tokens have nothing to do with what is happening on the ground and called the issue of digital currency a secondary event. He also noted that Zimbabweans are increasingly abandoning the local currency and said that this is something that the country’s central bank should worry about.

The launch of the Zimbabwean digital currency comes amid the desire of many countries to launch their own CBDC. These aspirations are realized with varying success.

Economist Ignazio Angeloni, in his article on the prospects for the introduction of digital currencies in Europe, argues that the European Central Bank should continue research on this issue and refrain from launching virtual money until new factors support the relevant decision. He stated that the risks associated with CBDC are stronger than the arguments in favor of introducing a new generation of currency.

In some African countries, there is currently a situation where the digital currency is rapidly gaining popularity. For example, in Nigeria, against the background of a massive shortage of cash, the level of popularity of virtual money has grown. In March, the cost of eNaria transactions in this country increased by 63%. The head of the Central Bank of Nigeria, Godwin Emefiele, said that eNaira has become the preferred channel for electronic payments to expand access to financial services and social activities.

As we have reported earlier, Netflix adds Zimbabwean billionaire to its board.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.