{"id":20208,"date":"2023-04-25T07:00:29","date_gmt":"2023-04-25T07:00:29","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/zimbabwes-central-bank-says-upcoming-gold-backed-digital-currency-to-help-reduce-demand-for-us-dollar-africa-bitcoin-news\/"},"modified":"2023-04-25T07:00:29","modified_gmt":"2023-04-25T07:00:29","slug":"zimbabwes-central-bank-says-upcoming-gold-backed-digital-currency-to-help-reduce-demand-for-us-dollar-africa-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/zimbabwes-central-bank-says-upcoming-gold-backed-digital-currency-to-help-reduce-demand-for-us-dollar-africa-bitcoin-news\/","title":{"rendered":"Zimbabwe’s Central Bank Says Upcoming Gold-Backed Digital Currency to Help Reduce Demand for US Dollar \u2013 Africa Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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The governor of the Zimbabwean central bank, John Mangudya, recently revealed that his institution is planning to introduce a gold-backed digital currency. According to the governor, the soon-to-be-introduced gold-backed digital currency is expected to help diminish local residents\u2019 demand for the U.S. dollar. <\/strong><\/p>\n

Taming High Demand for the US Dollar<\/h2>\n

The Zimbabwean central bank has said it will introduce a gold-backed digital currency that will be used both as an alternative medium of exchange and a store of value. According to a report<\/a> in the Sunday Mail, this gold-backed version of the Zimbabwean currency will complement the physical gold coins that were introduced in 2022 by the Reserve Bank of Zimbabwe (RBZ).<\/p>\n

As reported<\/a> by Bitcoin.com News in early July of 2022, the gold coins were part of RBZ\u2019s multi-pronged strategy that sought to halt the depreciation of the local currency. A few months after their introduction, the Zimbabwean central bank governor John Mangudya said the gold coins had proven to be an \u201ceffective open market instrument for mopping up excess liquidity in the economy.\u201d<\/p>\n

In addition to being an effective tool for the RBZ, the physical gold coins were intended to help diminish local residents\u2019 demand for the greenback which they see as an alternative store of value. However, despite the RBZ\u2019a injection of over 25,000 gold coins into the financial system so far, local demand for the U.S. dollar has not dissipated. This, according to Mangudya, has prompted the RBZ to look for another way of tackling the problem.<\/p>\n

\u201cWe shall also soon be introducing digital gold tokens to ensure that those with low amounts of local currency are able to purchase the gold units so that we leave no one and no place behind,\u201d the governor reportedly said.<\/p>\n

The RBZ governor nevertheless did not provide details of when the gold-backed digital currency will start circulating.<\/p>\n

Meanwhile, the Sunday Mail report also quotes Mangudya offering his reasons why the local currency depreciated on the parallel market. He said the \u201cexpectations of increased foreign currency supply\u201d versus lower supply seen in the first three weeks of April may partly explain why the currency has depreciated<\/a> from ZWL1,200 per dollar seen in March to the current rate of around ZWL1,800 per dollar.<\/p>\n

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What are your thoughts on this story? Let us know what you think in the comments section below. <\/strong><\/em><\/p>\n

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\nTerence Zimwara <\/h6>\n

\nTerence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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