Zimbabwe’s Central Bank Residents and Institutions Can Use Digital Tokens for Payments or Settlements

Zimbabwe's central bank allows residents and institutions to use digital tokens for payments and settlements.

Author: Terence Zimwara, Bitcoin.com; Translation: Song Xue, LianGuai

Using Gold-Backed Tokens to Preserve Value

The Governor of the Reserve Bank of Zimbabwe (RBZ) has stated that gold-backed digital tokens have now become an approved method for payment or settlement of domestic transactions in Zimbabwe. John Mangudya, the Governor of RBZ, further stated in a statement released on October 5th that digital tokens will also continue to serve as a store of value.

Over the past few months, RBZ has been committed to supporting infrastructure development. Initially, the central bank stated that these tokens (now known as ZIG tokens) would help holders to be immune from the effects of inflation and currency devaluation.

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Purchasing Digital Tokens with Local Currency

Meanwhile, prior to the launch of the gold-backed digital tokens, RBZ had already introduced physical tokens to achieve the same purpose. When commenting on how the value of ZIG tokens is determined, the head of RBZ stated:

The value of ZIG will be equivalent to the value of the physical Mosi-au-Tunya gold coin and will continue to be influenced by the international gold price. The bank will maintain dedicated ZIG accounts and conduct intermediate transactions in ZIG in the same way as they conduct intermediate transactions in local currency and foreign currency.

The Reserve Bank of Zimbabwe also added that the applicable remittance tax is only half of the usual tax rate for transactions denominated in foreign currency.

According to The Herald, ZIG tokens are issued in units of one milligram of gold, with a value slightly above 6.1 cents. The report also states that both individuals and institutions can purchase tokens with local currency and foreign currency.

Mangudya stated that in order to appease skeptics, RBZ has hired external auditors to provide services to “verify the availability and adequacy of gold for ZIG at any given time”. However, the central bank’s statement did not disclose the name of the auditor.

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