On April 23, the Reserve Bank of Zimbabwe (RBZ) said the gold-backed digital asset will be used as legal tender in the African nation.
The move is part of an effort to stabilize the country’s economy and local currency’s continued depreciation against the U.S. dollar.
According to reports in local media, the move will allow those holding small amounts of Zimbabwean dollars to exchange their money for digital tokens. This will help them store value and hedge against currency volatility.
RBZ Governor Dr. John Mangudya said the current exchange rate volatility was caused by “expectations of increased foreign currency supply.”
This is due to the start of the tobacco season when farmers receive receiving payments in USD.
Distancing From The Dollar
It is not the first time Zimbabwe has turned to gold to address currency volatility issues. Last year, gold coins were introduced to stabilize the local currency. It should officially trade at around $Z1,000 to the dollar but often changes
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