Central Bank Of Zimbabwe Invites Citizens To Subscribing Gold-Based Digital Currency

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Central Bank Of Zimbabwe Invites Citizens To Subscribing Gold-Based Digital Currency. The Reserve Bank of Zimbabwe (RBZ) is inviting individuals and financial institutions in the country to subscribe to a gold-backed digital token. Token purchases must be a minimum of USD 10 for individuals and USD 5,000 for financial institutions and companies.

The Central Bank of Zimbabwe announced last April that a token meant to counter the volatile local currency, would be issued on May 8, 2023. The move aims to shore up the national currency, the Zimbabwean dollar, which is depreciating rapidly amid years of economic woes. year in the southern African country.

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As an illustration, in March inflation in Zimbabwe reached 87.6 percent, after hitting a high of 285 percent in 2022.

The central bank has divided the issuance and use of tokens into two phases. In the first phase, tokens will be issued for investment purposes and available for sale via banks. Tokens will be stored in digital wallets or cards and made available for transactions between individuals as well as for individuals to business entities or vice versa in the second phase.

“Holders of physical gold coins, at their discretion, will be able to exchange or convert, through the banking system, physical gold coins into gold-backed digital tokens,” the bank said, quoting CoinDesk, Saturday (6/5/2023).

Confidence in Zimbabwe’s currency was extremely low after people’s savings in 2008 were wiped out by hyperinflation, which reached 5 billion percent, according to the International Monetary Fund, almost a world record.

Hyperinflation resulted in the country at one point issuing Zimbabwean 100 trillion dollar banknotes before the government was forced to temporarily suspend the currency and allow the US dollar to be used as legal tender.

In 2019, the government reintroduced the Zimbabwean currency and banned foreign currency for local transactions. But few took notice and the black market boomed, while the local currency was quickly devalued. The government relented and overturned the US dollar ban.

Central Bank Of Zimbabwe Invites Citizens To Subscribing Gold-Based Digital Currency. With that inflationary debacle in mind, many people today prefer to find scarce US dollars on the illegal market to keep at home as savings or for day-to-day transactions, where the US currency is still used. Confidence in the Zimbabwean dollar is so low that many retailers and even some government agencies do not accept it.

Zimbabwe has tried to prevent its currency from depreciating with unusual ideas before. In July 2022, gold coins were launched as legal tender to stabilize the local currency.

The Zimbabwean government has banned the export of raw lithium because it is considered detrimental. Zimbabwe has an estimated loss of 1.7 billion euros (Rp 28.5 trillion) because it does not process lithium domestically.

Lithium is an important material for making batteries, including electric vehicle (EV) and laptop batteries. The price of “white gold” continues to skyrocket.

ReportedAfrican News, Sunday (1/1/2022), the Zimbabwean government said it was a loss because it exported lithium as a raw mineral, and not as a battery that is processed domestically. The government wants to create a battery industry rather than letting foreign companies dominate battery production.

Lithium prices are said to have risen 1,100 percent in the last two years. However, international companies extract lithium from Zimbabwe raw without developing industries to process it.

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This policy will also prohibit illegal miners from digging lithium and smuggling it out of the country.

Zimbabwe is the largest lithium producer in Africa. The Zimbabwean government says the country’s supplies are sufficient to meet one-fifth of world demand.

However, Zimbabwe is not the only source of lithium in the world. According to Volkswagen AG’s website, Chile, Australia, Argentina and China have larger lithium inventories and production than Zimbabwe.

Chile has 8 million tons of lithium reserves in the country. Australia has 2.7 million tonnes, Argentina has 2 million tonnes, and China records 1 million tonnes.

Central Bank Of Zimbabwe Invites Citizens To Subscribing Gold-Based Digital Currency. The policy in Zimbabwe is similar to that in Indonesia which prohibits the export of raw nickel, chooses downstream, and asks foreign companies to build smelters in the country. However, the policy of banning Indonesian nickel exports was declared to be inconsistent with international law by the WTO after being sued by the European Union.

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