04-24-2023 icon

Zimbabwe’s Federal Reserve Bank to Rollout Gold-Supported Virtual Currency

By Lucy Adegbe

The central banking authority of Zimbabwe is ready to roll out a gold-supported virtual coin to be utilized as a means of exchange in the nation. This action is an executive effort to solidify the nation’s already known legal tender from persistent fall in value with respect to the United States dollar. 

As published by a national news media The Sunday Mail, the action will enable a minimal proportion of the Zimbabwe dollar to get traded for the gold-supported coin, allowing many citizens to evade coin instability. The nation’s central bank head John Mangudya noted that the initiative aims to exclude “no one or no place.” 

The nation’s legal tender exchange rate is around 1,001 ZWL to a United States dollar, however, the street market gives an exchange rate of 1,750 ZWL to a dollar in the nation’s capital city Harare, as published by Bloomberg. 

Zimbabwe’s yearly cost of living index marked a 12-month low last month at 87.6%, from its 92% attained in the second month of the year. 

Zimbabwe has been struggling to overcome currency instability and inflation for more than ten years. In 2009, the nation permitted the use of the United States dollar as a means of exchange following an outbreak of runaway inflation. Ten years later, the nation’s original currency was brought back to help support the nation’s troubled economy. In 2022, the government chose to adopt the US currency again as it attempts to restrain inflation in the region.