Zimbabwe sells millions of gold-backed crypto tokens despite IMF warning

Zimbabwe’s Reserve Bank has sold about $39 million worth of gold-backed digital tokens worth 14 billion Zimbabwean dollars, despite warnings from the International Monetary Fund.

On May 12, the central bank of Zimbabwe announced that it had received 135 applications to buy gold-backed cryptocurrencies worth ZW$14.07 billion.

The Zimbabwe Dollar is officially trading at 362 ZWD to USD According creating about $38.9 million in value for XE.com (but much more down the road).

The crypto token, first introduced in April, is backed by 139.57 kg of gold, with the sale running from May 8 to May 12.

Tokens were sold for a minimum price of $10 for individuals and $5,000 for corporations and other entities. The minimum vesting period for the tokens is 180 days and they can be held in e-gold wallet or e-gold card.

The move is reportedly part of an effort to stabilize the country’s economy and the continued depreciation of the local currency against the greenback.

The second round of the digital token sale will be conducted and the bank has requested applications to be submitted by May 18 this week. According to local media, RBZ Governor Dr. John Mangudia commented,

“The purpose of issuing gold-backed digital tokens is to expand the value-preserving tools available in the economy and to increase the divisibility of investment tools and broaden their access and use by the public.”

As of May 9, the move follows the International Monetary Fund’s warning against the African nation’s plan for a gold-backed currency, arguing that it should liberalize its foreign exchange market instead. Bloomberg Report.

An IMF spokesperson said: “The benefits that could result from this measure need to be carefully assessed, including, for example, macroeconomic and financial stability risks, legal and operational risks, governance risks, the cost of abandoned FX reserves and potential risks.” risk.” Bloomberg.

Connected: Zimbabwe’s central bank to issue gold-backed digital currency: report

Zimbabwe has been battling currency volatility and inflation for over a decade. In 2009, the country adopted the USD as its currency after rendering the local currency worthless following a period of hyperinflation.

The Zimbabwean dollar was re-introduced in 2019 to revive the local economy, but again became volatile.

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