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Ignoring IMF Warning, Zimbabwe Central Bank Sells Gold-Backed Digital Tokens | Cointelegraph | Cointelegraph Japan

The Reserve Bank of Zimbabwe has sold 14 billion Zimbabwean dollars ($39 million) worth of gold-backed digital tokens despite warnings from the International Monetary Fund (IMF).

The Central Bank of Zimbabwe announced on May 12 that it had received 135 applications to purchase gold-backed cryptocurrencies worth a total of 14.07 billion Zimbabwean dollars.

The Zimbabwean dollar officially trades at $362 a dollar, but it trades for much more on the street, with notional sales of about $38.9 million, according to

Announced in April, the cryptocurrency token is backed by 139.57 kilograms of gold and will be sold from May 8 to May 12.

Gold-backed digital currency sale results. source: reserve bank of zimbabwe

Tokens sell for as little as $10 for individuals and $5,000 for companies and other entities. Tokens have a minimum holding period of 180 days and can be stored in E-Gold wallets and E-Gold cards.

The move is seen as part of efforts to stabilize the domestic economy and counter the continued depreciation of the currency against the dollar.

A second round of digital token sales is underway, with the Central Bank of Zimbabwe requiring applications to be submitted this week and settlements to be completed by May 18. According to local media reports, RBZ Chairman John Mangudiya said:

“The issuance of gold-backed digital tokens aims to expand the store of value available to the economy, increase the divisibility of investment vehicles, and expand public access and use.”

Bloomberg reported on May 9 that the International Monetary Fund has sounded the alarm over plans for a gold-backed token and urged Zimbabwe to open up its foreign exchange market.

An IMF spokesman told Bloomberg: “A careful assessment should be undertaken to ensure that potential risks are outweighed, including macroeconomic and financial stability risks, legal and operational risks, governance risks, and the cost of decommissioning reserves.”

Zimbabwe has struggled with currency volatility and inflation for more than a decade. In 2009, hyperinflation rendered the local currency worthless and the country adopted the US dollar as its currency. In 2019, the Zimbabwean dollar was reactivated to revive the local economy, but there have been wild swings.

Translator/Editor Cointelegraph Japan

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