The Reserve Bank of Zimbabwe has achieved a successful sale of gold-backed digital tokens, generating 14 billion Zimbabwean dollars worth of transactions. This comes despite a warning from the International Monetary Fund (IMF), highlighting the country’s plan for a gold-backed currency.

The central bank of Zimbabwe recently announced that it received a total of 135 applications, amounting to 14.07 billion Zimbabwean dollars, from interested buyers of the gold-backed cryptocurrency. Based on the official exchange rate of 362 ZWD to 1 USD, the value of the gold sold is approximately $38.9 million.

The sale, which took place between May 8 and May 12, involved crypto tokens backed by 139.57 kilograms of gold. Individual investors were able to purchase tokens at a minimum price of $10, while corporations and other entities had a minimum purchase requirement of $5,000. The tokens come with a minimum vesting period of 180 days and can be stored in e-gold wallets or on e-gold cards.

The primary objective of this initiative is to stabilize Zimbabwe’s economy and address the ongoing devaluation of the local currency in relation to the US dollar. Dr. John Mangudya, the Governor of the Reserve Bank of Zimbabwe, reassured the public that the gold-backed digital tokens are fully supported by physical gold held by the central bank. He emphasized that the issuance of these tokens aims to expand the range of value-preserving instruments available in the economy, enhance their divisibility, and promote wider public access and usage.

Dr. Mangudya outlined two distinct phases for the issuance and utilization of gold-backed digital tokens. In the first phase, the tokens are intended for investment purposes with a vesting period of 180 days. They can be redeemed similarly to existing physical gold coins. In the second phase, the tokens held in e-gold wallets or on e-gold cards can be traded, facilitating person-to-person (P2P) and person-to-business (P2B) transactions and settlements. This versatility allows the tokens to serve both as a means of payment and a store of value.

Despite the success of the sale, the IMF remains cautious about Zimbabwe’s plan for a gold-backed currency. The organization suggests that the country should instead focus on liberalizing its foreign exchange market as a more suitable approach.

Overall, Zimbabwe’s Reserve Bank has demonstrated its ability to attract significant interest in gold-backed digital tokens, generating substantial transactions. The initiative serves as a potential mechanism to stabilize the country’s economy and mitigate currency devaluation concerns, although concerns from the IMF highlight the need for careful consideration and evaluation moving forward.