Zimbabwe has managed to sell a noteworthy volume of digital tokens backed by gold, valued at around $39 million, despite a cautionary statement from the International Monetary Fund (IMF). The Reserve Bank of Zimbabwe was able to sell tokens worth 14 billion Zimbabwe Dollars, which can be acquired through both local and foreign banks with a 20% margin above the interbank mid-rate.
Zimbabwe Selling Tokens
On May 12, an announcement was made by Zimbabwe’s central bank concerning the 135 applications it received for purchasing the tokens backed by gold. The total value of these applications amounts to 14.07 billion Zimbabwean dollars, which is equivalent to around $38.9 million, based on the official exchange rate of 362 Zimbabwean dollars to one United States dollar according to XE.com.
The IMF Warning
According to a Bloomberg report on May 9, the International Monetary Fund (IMF) has raised concerns over an African country’s proposal to launch a gold-backed currency.
The IMF advised the country to concentrate on liberalizing its foreign-exchange market instead. The spokesperson for the IMF emphasized the necessity of conducting a comprehensive analysis to ascertain whether the benefits of the proposed currency outweigh the possible dangers and expenses.
These hazards comprise instability in the macroeconomic and financial domains, legal and operational risks, governance risks, and the cost of sacrificing foreign exchange reserves.
About the Digital Tokens
These digital tokens were launched in April and are supported by 140 kg of gold. They were offered for sale from May 8 to May 12 with a minimum price of $10 for individuals and $5,000 for corporations and other entities. Token holders must keep them for at least 180 days before they can be stored in e-gold wallets or on e-gold cards.
Currently,Zimbabwe is striving to stabilize its economy and tackle the continuous depreciation of the domestic currency in comparison to the US dollar. To accomplish this objective, the bank has decided to conduct another round of digital token sales and has invited applications to be filed by the end of this week. The settlement of the sales is scheduled for May 18.