The Reserve Bank of Zimbabwe (RBZ) plans to introduce a gold-backed digital currency, but there are concerns that it may be a scam to deceive people. The governor of the RBZ, John Mangudya, stated that the currency would be launched in two phases starting on May 8, 2023, and would be used for payment and as a store of value. However, the announcement has divided public opinion.
Walter Mzembi, a former Minister of Tourism and Hospitality, believes “this is the way to go!” In a Twitter post seen by Pindula News, the self-exiled former minister said:
May not make sense to many now but anything currency must begin to be anchored by our precious minerals, mined and stored and proven reserves. The return of the Gold Standard is imminent only this time it will be digital… If you follow the debate in the #BRICS even our own #AfCFTA you will understand where things are going globally.
Zimbabwean politician Zvaringeni Samuel Chasi, leader of the opposition People’s Patriotic Party, however, thinks that the RBZ intends to scam people by introducing a gold-backed digital currency. He said:
Introduction of Crypto Currency by #RBZ is a #PonziScheme and Fraudulent. Individuals, Pensioners, Companies, Investors, etc are being owed #Trillions diverted for personal use over past decades with no single arrest or compensation. Citizens are open to rather Trade on.
Simon Musvosve also expressed similar concerns, calling for the stabilization of the local currency instead. He added that people’s trust in digital currencies is decreasing due to too much risk involved. He said:
Give us the old, real, crispy dollar note-remember the ones Governors Moyana & Tsumba signed- not ravaged by inflation. Otherwise, USD ngoma ndiyo-ndiyo. Simon Musvosve @Musvosve – I keep abreast with new developments. Without going into the geopolitics, I don’t think this will be a panacea for Zim’s currency woes. Our people need workable solutions now. The rest are lofty dreams.
Economic blogger, Tinashe, Twitter handle Baba_nyenyedzi has also expressed worry about the RBZ’s plan, calling it a crazy move. In a Twitter post seen by Pindula News, he said:
Gold-backed digital currency. The RBZ is again off the tracks with another crazy idea. If RBZ believes in backing currency with gold why not back their own issued currency ZWL with gold The PMR rate is now 1800 double the Jan rate in four months. Inflation spiralling out of control. Yet RBZ has “gold reserves” to back a digital currency. They should back ZWL with gold and the rate ( including inflation) will stabilize. Surely it’s simple enough.
The gold-backed digital tokens will be issued in two phases. In phase one, the tokens will be available for investment and will have a vesting period of 180 days. They will be redeemable in the same way as existing physical gold coins and can be purchased through banks using both foreign currency and the Zimbabwe dollar. Banks will create dedicated accounts for holding the tokens. Physical gold coin holders can exchange them for digital tokens through the banking system.
In phase two, the tokens will be tradable and used for Person-to-Person (P2P) and Person-to-Business (P2B) transactions and settlements. The pricing of the tokens in a foreign currency will be the same as the physical gold coins, based on the international gold price determined by the London Bullion Market Association (LBMA) PM fix.