Central Bank of Zimbabwe: Residents and institutions can use digital tokens for payment or settlement

Author: Terence Zimwara, Bitcoin.com; Compiler: Songxue, Golden Finance

Preserve value with gold-backed tokens

Zimbabwe’s gold-backed digital token is now an approved method of paying or settling domestic transactions, the central bank governor said. Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya added in a statement released on October 5 that digital tokens will also continue to serve as a store of value.

RBZ has been working over the past few months to support infrastructure development. Initially, the central bank said the tokens, now known as ZIG tokens, would help protect holders from the effects of inflation and currency devaluation.

Buy digital tokens with local currency

Meanwhile, before launching a gold-backed digital token, RBZ has launched a physical token to serve the same purpose. Commenting on how the value of the ZIG token is determined, the RBZ boss said:

The value of ZIG will be equivalent to the value of physical Mosi-au-Tunya gold coins and will continue to be affected by international gold prices. Banks will maintain dedicated ZIG accounts and conduct intermediary transactions in ZIG in the same manner as they conduct intermediary transactions in domestic and foreign currencies.

The Central Bank of Zimbabwe added that the applicable remittance tax is only half the rate normally applicable to foreign currency denominated transactions.

According to the Herald, ZIG tokens are issued in units of one milligram of gold and are worth just over 6.1 cents. The report added that both individuals and institutions can purchase the token using local and foreign currencies.

To appease doubters, Mangudya said RBZ has engaged the services of external auditors to “verify ZIG’s gold availability and adequacy at any given time”. However, the central bank statement did not disclose the name of the auditor.