According to a report, the Reserve Bank of Zimbabwe has commenced trials, or the “dry run” test, for the viability of launching a gold-backed digital currency. Nelson Mupunga, the director of economic research at the central bank, reportedly said the digital currency will act as an alternative to foreign currency.
Local Residents’ Insatiable Demand for the Greenback
The Zimbabwean central bank has commenced a “dry run” to test the feasibility of issuing a gold-backed digital currency which is set to be used as a means of payment, a report has said. The digital currency, which will be accepted as legal tender for peer-to-peer transactions, is part of the Reserve Bank of Zimbabwe (RBZ)’s raft of measures which are aimed at stabilizing the local currency.
The latest revelation by the Zimbabwean central bank official comes just a few weeks after the RBZ initially announced plans to launch the P2P platform. As reported by Bitcoin.com News, the launch of the platform will make it possible for holders of digital gold tokens to trade them. John Mangudya, the RBZ governor, has in the past stated that the gold-backed tokens will help the country diminish its insatiable need for foreign currencies such as the U.S. dollar.
Gold-Backed Digital Currency as a Store of Value
According to Nelson Mupunga, the director of economic research and policy implementation for the RBZ, the digital currency will act as an alternative to the greenback and other foreign currencies.
“We are at an advanced stage; we are at the testing stage now. Soon, we will allow the gold digital token to be used for transaction purposes just like someone buys foreign currency from the parallel market. But at the same time, we can transact with. So, the token is coming and will satisfy the same function,” said the RBZ official.
The official also added that the central bank had chosen to launch the gold-backed digital currency after observing local residents’ practice of ditching the floundering local currency for the greenback. Therefore, instead of using the greenback to store value, residents in the inflation-hit country will be able to do this using gold-backed digital tokens.
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