As a researcher with a background in economics and experience living through hyperinflation in Zimbabwe, I find the introduction of Zimbabwe Gold (ZiG) as a new currency by the Reserve Bank an intriguing development. This is particularly true given my personal experiences with the instability of the local fiat currency, which had lost nearly all value due to rampant inflation.
The Reserve Bank of Zimbabwe has introduced two new forms, paper and coin, of their latest currency, called Zimbabwe Gold or ZiG. This comes after the digital version of the currency was launched in October. The ZiG serves as a replacement for the Zimbabwean dollar and is supported by a combination of gold and various foreign currencies.
On April 29, the central bank dispersed the physical currency to all financial institutions in the country, as reported by Bloomberg. The introduction of the ZiG was previously announced on April 5, with an exchange rate of 13.56 ZiG per U.S. dollar.
As a crypto investor, I’ve been closely following the development of digital trading for the ZiG since its official launch on April 2, even though it was initially introduced back in October with a value linked to gold. The shift towards this new currency has brought significant turbulence to the local stock market. Starting from now, businesses need to pay at least half of their taxes in ZiG.
The central bank established an interest rate of 20% when introducing a new and more stable currency, marking a significant decrease from a record-breaking high of 130%. John Mushayavanhu, the newly appointed central bank governor effective March 28th, expressed optimism that Zimbabwe’s inflation rate would drop annually from its current level of 55% to a more manageable 2%. At present, over 80% of transactions in the country are carried out using U.S. dollars, while the value of the Zimbabwean dollar had plummeted by nearly 75% this year alone.
The ZiG is supported by a combined reserve of 2.5 metric tons of gold and $100 million in foreign currencies, totalling an value of approximately $285 million. This substantial reserve represents a threefold value compared to the number of ZiGs being circulated, as stated by Mushayavanhu during his press conference on April 5th.
“We want a solid and stable national currency in this country. It does not help to print money. Certainly under my watch it is not going to happen.”
In the African continent, Zimbabwe came in third place in terms of cryptocurrency adoption during the year 2023. However, the International Monetary Fund expressed disagreement with the proposal to introduce a gold-backed currency following the announcement of the Zimbabwean Gold (ZiG) in April 2023.
Read More
- Top gainers and losers
- DOP PREDICTION. DOP cryptocurrency
- LDO PREDICTION. LDO cryptocurrency
- JASMY PREDICTION. JASMY cryptocurrency
- KAI PREDICTION. KAI cryptocurrency
- MOCHI PREDICTION. MOCHI cryptocurrency
- SILLY PREDICTION. SILLY cryptocurrency
- STOG PREDICTION. STOG cryptocurrency
- WRLD PREDICTION. WRLD cryptocurrency
- WOJAK PREDICTION. WOJAK cryptocurrency
2024-04-30 23:44