The Reserve Bank of Zimbabwe has declared that citizens within the country can now use its gold-backed digital token, ZiG, for making payments.
As per the statement, the bank will employ external auditors to guarantee that the token maintains full gold backing at all times.
Zimbabwe’s Gold Digital Token to Face Lower Tax Than Foreign Currency
The Reserve Bank of Zimbabwe clarified in a statement released on X (formerly Twitter) that ZiG’s value will align with that of Zimbabwe’s physically-backed coin:
“The value of ZiG will be at par with the value of the physical Mosi-oa-Tunya gold coin and will remain informed by the international gold price.”
At the time of publication, Gold is trading at $1,859 USD.
It further points out that the Intermediary Money Transfer Tax (IMTT) will be half of the IMTT applied to transactions in foreign currency.
In June 2023, the IMTT rate for foreign currency transactions was reduced from 2% to 1%. This is in line with the rate for local currency transactions.
BeInCrypto recently reported on the potential of a gold-backed digital token to help stabilize the Zimbabwean dollar (ZWL). This is in light of the ongoing inflationary trends.
At the time of writing, 1 ZWL is equivalent to approximately $0.0031 USD.
Global CBDC Development Continues
In April, Zimbabwe introduced GBDTs as a means for its citizens to hedge against inflation by using them as a store of value.
Gold-backed currencies are constrained by the quantity of gold in the possession of central banks. Meanwhile, governments can continue injecting more cash into the economy, which contributes to the depreciation of the dollar’s value.
However, the utility for transactions now closely resembles that of a central bank digital currency (CBDC).
A recent survey conducted by the CFA Institute revealed that there are positive beliefs about CBDCs across the globe. According to the survey findings, 42% of respondents supported the launch of digital currencies by central banks. On the other hand, 34% opposed it, and 24% had no particular preference.
In June, BeInCrypto reported that over 20 countries would actively advance toward launching CBDCs in 2023.
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