The Reserve Bank of Zimbabwe sold Z$14 billion worth of gold-backed tokens se about $39 million despite an IMF warning. These crypto tokens were first introduced in April. They are backed by 139.57 kilograms of gold and their initial sale was from May 8 to May 12.
A controversial sale to stabilize Zimbabwe’s economy?
On May 12, the Central Bank of Zimbabwe (RBZ) announced that it had received 135 applications for a total of Z$14.07 billion to buy the gold-backed cryptocurrency. At the current exchange rate this equates to approximately $38.9 million.
The tokens were sold at a minimum price of $10 for individuals and $5,000 for corporations and other entities. The minimum token vesting period is 180 days. To hold them, acquirers can use e-gold wallets or e-gold cards.
Zimbabwe had to take this decision to stabilize its economy. In addition, the country wants to combat the continued depreciation of its local currency against the US dollar. According to remarks by RBZ Governor Dr. John Mangudya, said relayed by fxstreet :
” The issuance of gold-backed digital tokens aims to expand the instruments of value preservation available in the economy. This also allows toimprove the divisibility of investment instruments and expand their access and use by the public. »
A sale in contradiction with the suggestions of the IMF
A second round of sales is planned. For this occasion, the bank has requested that the requests be submitted this week. However, the IMF continues to affirm its opposition to the strategy from Zimbabwe. The institution thinks the country should on the contrary liberalize its foreign exchange market. An IMF spokesperson reportedly told Bloomberg:
” Careful assessment should be conducted to ensure that the benefits of this measure outweigh the costs and risks. Including, for example, macroeconomic and financial stability risks, legal and operational risks, governance risks, cost of abandoned foreign exchange reserves “.
For more than ten years, Zimbabwe has had huge problems with currency volatility and inflation. In 2009, hyperinflation has rendered its currency useless, so much so that the country adopted the USD. Faced with the situation which is not improving, would crypto be the solution?
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