THE Reserve Bank of Zimbabwe (RBZ) is begging the transacting public to purchase the Zimbabwe gold-backed digital token (ZiG), seen as a store of value.
Earlier this month, the RBZ introduced ZiG to offer consumers an alternative store of value to the greenback to reduce the reliance on the United States dollar.
This comes over a year after the central bank introduced physical gold coins into the market to mop up excess local currency balances, blamed for fuelling parallel market activities.
To date, 322 kilogrammes of gold was bought.
Speaking at the Zimbabwe National Chamber of Commerce breakfast meeting on Wednesday, the RBZ Economic Research Department deputy director William Kavila pleaded with delegates to buy ZiG.
“Please, come and buy those tokens. Put your money there. They are backed by gold. As the governor (RBZ governor John Mangudya) promised in his monetary policy statement, the gold amount we have is going to be audited for your comfort,” he said.
However, delegates laughed off the notion of trusting the digital token.
Economist Ashok Chakravarti said confidence in ZiG was low considering that the bond notes collapsed despite authorities saying they were pegged at 1:1 to the dollar when they were introduced in 2016.
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“ZIG has gone an extra step in terms of having a digital currency but ZiG as Kavila is saying, is fully backed by gold bullion. Currently, the issuance is, according to the central bank, about 322 kilos worth of ZiG that have been issued to the market and these 322kg is available in their wallets, it is physically there,” he said.
“Now, in the last Monetary Policy Committee (MPC) meeting, to answer your concerns about trust and confidence, the MPC resolved to say that there needs to be an independent verification of the gold in the vaults of the RBZ. That should give you confidence. So, that gold is there and is going to be independently verified.”
During a Parliament session on Wednesday, Finance, Economic Development, and Investment Promotion deputy minister David Mnangagwa said ZiG was not a currency but a store of value.
“The ZiG is a tokenised coin which should be differentiated from our currency. As Zimbabwe, we only have one currency, and it is the Zimbabwean dollar. What ZiG is then becomes a store value like what we have with the gold coins, which means that the ZiG does not earn interest at the same time as the gold coins.”
He said ZiG will operate on the equivalence of the available gold at the RBZ: the more gold reserves increase, the more ZiG increases.
“ZiG is not a currency; it is a store of value similar to how we had our gold coins, we have tokenised these gold coins into a digital token,” Mnangagwa added.
ZiG can be kept as electronic money or as mobile money with plans to introduce a physical card for the digital gold token, according to the deputy minister.
“As we increase our gold reserves, it will also increase. Once the banks work on the platforms, US dollar codes will be accessible even in rural areas. They will be able to go and get the cards from their banks,” Mnangagwa said.
