Zimbabwe is preparing to launch gold-backed digital tokens, and the central bank has set a price for investors. The tokens will be available for purchase beginning May 8 at a minimum price of $10 for individuals and $5,000 for corporations and other entities.
The tokens will be sold in both US dollars and local currency, with the local currency price set at a 20% margin above the willing-buyer willing-seller interbank mid-rate.
The Reserve Bank of Zimbabwe confirmed its plans to introduce the gold-backed digital currency on April 28, and interested investors will have a two-day window to participate in the offer from May 8.
The move is part of Zimbabwe’s ongoing efforts to support its local currency, which has been struggling against the US dollar this year. According to Bloomberg, the local currency has weakened by 37% on the official market.
Eight months ago, Zimbabwe introduced gold coins as a store of value in an attempt to support the local currency. Following approval from the monetary policy committee in March, the introduction of digital tokens is the most recent step in this plan.
The willing-buyer willing-seller interbank mid-rate is a financial transaction benchmark that determines the midpoint between buying and selling rates. It is based on current market conditions such as supply and demand and serves as a benchmark for exchange rates quoted by banks and financial institutions.
According to Bloomberg, although Zimbabwe’s currency, the ZWL, is quoted at 1,001 against the USD, it is commonly exchanged at 1,750 on the streets of Harare, the country’s capital city. The introduction of gold-backed digital tokens is expected to increase the local currency’s stability and encourage investment in the country.
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