- Despite warnings from the IMF, the Reserve Bank of Zimbabwe has received 135 applications for gold-backed crypto tokens.
- Applications raised 14.07 billion Zimbabwean dollars in gold-backed tokens in hopes of reviving the Zimbabwean economy.
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The Reserve Bank of Zimbabwe (RBZ) has sold $39 million worth of gold-backed crypto, about 14 billion Zimbabwean dollars, in an attempt to stabilize the country’s economy and reduce the local currency’s continued depreciation against of the US dollar, despite warnings from the International Monetary Fund (IMF).
The RBZ announced on May 12 that it had received 135 applications, amounting to 14.07 billion Zimbabwe dollars, to buy 139.57 kilograms of the gold-backed cryptocurrency. Tokens are sold at a minimum price of $10 for individuals and $5,000 for corporations and other entities.
The IMF has warned that the introduction of gold-backed crypto tokens could pose a risk to financial stability, saying the sale of these tokens could pose a risk of the Zimbabwean dollar and instead should act to “free the foreign exchange market. ,” ACCORDING in a Bloomberg report on May 9.
A spokesperson told Bloomberg that “a careful assessment must be made to ensure that the benefits from this measure outweigh the costs and potential risks including, for example, macroeconomic and financial stability risks, legal risks and operation, management risks, costs of forgotten FX [foreign exchange] reserves.”
The RBZ defended the move, saying gold-backed crypto tokens would provide a stronger store of value than the Zimbabwean dollar, which has an official application. expressed:
“RBZ Gold-backed Digital Tokens are issued to expand value-preserving instruments available in the economy, improve the diversification of investment instruments and expand their access and use by the public.”
Gold backed crypto tokens the is expected to be an important tool to stabilize the Zimbabwean economy, one that is under “great pressure” to recover from persistently high inflation, ACCORDING to Bloomberg.
Zimbabwean President Emmerson Mnangagwa sympathized with the struggles of the poor and isolated when he promised to revive the economy in a 2019 State of the Nation address, increasing:
“Reviving the economy from death requires time, patience, unity of purpose and perseverance.”