Zimbabwe Launches Gold-Backed Digital Token “ZiG” as a Payment Method

The Reserve Bank of Zimbabwe (RBZ) has officially introduced its gold-backed digital token, Zimbabwe Gold (ZiG), as a payment method on October 5. This new initiative builds on the RBZ’s project, which was first announced in April 2023, where each digital token is backed by a specific amount of physical gold held within the bank’s reserves.

The RBZ’s journey into digital tokens backed by physical gold began in 2022, and it has seen considerable success in their adoption. The primary aim of this project, including the physical coins and the new digital token ZiG, is to encourage local investors to redirect their funds into national assets rather than relying on the United States dollar. This objective is particularly challenging in a country facing triple-digit inflation. RBZ Governor John Mangudya emphasized:

“The issuance of the gold-backed digital tokens is meant to expand the value-preserving instruments available in the economy and enhance divisibility of the investment instruments and widen their access and usage by the public.”

The ZiG digital tokens can be securely stored in e-gold wallets or on e-gold cards and are suitable for peer-to-peer and business transactions.

The RBZ has established different price levels for ZiG based on the weight of its gold reserve. For example, 1 ounce of ZiG can be acquired for $1,910, and 0.1 ounce for $191. According to the RBZ, on September 28, investors purchased approximately 17.65 kilograms (kgs) worth of ZiG, using both Zimbabwean and U.S. dollars. In total, around 350 kg of gold worth of ZiG has been sold since the initial digital token sales.

Zimbabwe has faced currency instability and surging inflation for over a decade. In response to a period of hyperinflation in 2009, the nation adopted the U.S. dollar as its official currency, rendering the local currency virtually worthless. In an effort to revive the domestic economy, Zimbabwe reintroduced its own currency in 2019. However, this move was followed by a resurgence of currency volatility. The introduction of gold-backed digital tokens aims to provide more stable and reliable alternatives for both investors and the public in Zimbabwe.