The Reserve Bank of Zimbabwe has launched the new money unit Zimbabwe Gold (ZiG), available in digital and physical formats. The central bank created this new currency, backed by gold and stablecoin, to address national economic instability and reduce dependence on the U.S. dollar.
A plastic version of the ZiG, in the form of a paper and a coin, began circulation on April 29 and covered all national lenders by the day’s end as reported by Bloomberg. When ZiG was introduced in October as a digital payment system, it replaced the now depreciated Zimbabwean dollar which was pegged at 13.56 to the U.S. dollar.
A proposal of ZiG came up just a few months after the central bank’s interest rate was lowered down, from 130% to about 20%, under the lead of John Mushayavanhu who is the new head of the bank.
The money supply is worth 2.5 tons of gold, and the country has $100 million in foreign currency reserves. The sovereign is expecting an inflation rate in the country to plummet from over 55% to 2% per year.
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