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Zimbabwe launches a new digital currency backed by gold: What you need to know

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Zimbabwe has recently launched a new digital currency, the Zim-dollar, which is backed by gold reserves. The Zim-dollar is intended to help the country overcome its economic challenges, such as hyperinflation, currency shortages, and low productivity.

The Zim-dollar is not a cryptocurrency, but a digital version of the Zimbabwean dollar, which was reintroduced in 2019 after a decade of using foreign currencies. The Zim-dollar is issued by the Reserve Bank of Zimbabwe (RBZ) and can be accessed through mobile phones or bank accounts. The Zim-dollar is pegged to the US dollar at a fixed exchange rate of 1:1, and is backed by 40 tonnes of gold that the RBZ holds in its vaults.

The RBZ hopes that the Zim-dollar will boost confidence in the local currency, reduce reliance on foreign currencies, and increase financial inclusion and economic activity. The RBZ also claims that the Zim-dollar will be more secure and transparent than other digital currencies, as it will be regulated by the central bank and audited by independent third parties.

Photo Cred: Aljezera

However, some experts and critics have expressed doubts about the feasibility and sustainability of the Zim-dollar. They argue that the gold backing is not sufficient to guarantee the stability of the currency, as gold prices are volatile and subject to market fluctuations. They also question the credibility and capacity of the RBZ to manage the Zim-dollar, given its history of poor governance and monetary policy. They warn that the Zim-dollar could face legal challenges, technical glitches, cyberattacks, or public resistance.

The Zim-dollar is still in its early stages of implementation and faces many uncertainties and risks. It remains to be seen whether it will succeed in achieving its objectives and restoring Zimbabwe’s economic fortunes.

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