The Reserve Bank of Zimbabwe (RBZ) has revealed its strategic plan to introduce a gold-backed digital token (GBDT) for retail transactions.
This innovative initiative, initially introduced in May, aims to address the challenges posed by currency instability and high inflation rates in the country.
The GBDT offers a secure and convenient way for investors to store value while promoting market stability.
To combat the ongoing economic challenges, the RBZ took a multi-phased approach. The first phase involved issuing physical gold coins, which garnered significant attention from investors seeking stability.
Building on this initial success, the RBZ then introduced the Gold-Backed Digital Tokens (GBDT), a groundbreaking digital asset that is backed by physical gold reserves.
This unique feature offers investors a reliable and accessible way to preserve their wealth while avoiding the risks associated with storing physical gold.
The response to the GBDT introduction has been overwhelmingly positive, with investors embracing the new digital asset.
Within just a month of its launch, the RBZ issued the GBDT a remarkable 11 times, catering to 590 applications valued at ZW$50.50 billion and US$7,794.87 combined.
This strong demand demonstrates the potential of the GBDT to contribute to stabilizing inflation and exchange rate expectations.
In line with its commitment to technological advancement, the RBZ received Cabinet approval to develop a Central Bank Digital Currency (CBDC) in July 2022.
The GBDT has laid the groundwork for the potential development of the CBDC, as it already shares several key features with a digital currency.
The RBZ sees the GBDT as a stepping stone toward realizing a fully functional CBDC, providing a seamless transition for the nation’s financial ecosystem.
The RBZ is progressing rapidly toward the second phase of its GBDT initiative, focused on enabling the digital tokens for transactional use.
Collaborations with key stakeholders, including the Confederation of Zimbabwean Industries (CZI), are underway to facilitate the issuance of GBDT-denominated cards.
Additionally, the RBZ has unveiled plans to launch a comprehensive national awareness campaign. This campaign aims to educate the public about the benefits and utility of the GBDT, with the ultimate goal of complementing the use of the US dollar in domestic transactions once fully integrated.