2023-04-24 09:06:31
The Central Bank of Zimbabwe plans to introduce a gold-backed digital currency as legal tender in order to stabilize the Zimbabwe dollar (ZWL). The move is an initiative aimed at dampening ZWL’s continued appreciation once morest the US dollar.
The Sunday Mail report said the move will allow small amounts of Zimbabwean dollars to be exchanged for digital gold tokens, allowing more Zimbabweans to hedge once morest currency fluctuations. According to John Mangudya, Governor of the Central Bank of Zimbabwe, the plan aims to “nobody, anywhere should be left behind”.
The Zimbabwean currency is exchanged at ZWL 1,001 to the dollar, but Bloomberg information on the streets of the country’s capital, Harare, it is typically exchanged for 1,750 ZWL. The country’s annual inflation dropped to a one-year low of 87.6% in March from 92% in February.
According to Mangudya, the exchange rate on the black market is expected to stabilize following tobacco farmers receive their US dollars in the coming weeks. According to him, the current exchange rate fluctuation due to the tobacco season in the market is due to the “expectations of increased foreign exchange supply” caused.
Zimbabwe’s monetary impotence and lack of reforms led to the Wall Street Journal in March articledthat the country’s businesses “own money” they print pieces of paper, often handwritten, so that customers can pay.
Zimbabwe has been battling currency volatility and inflation for over a decade. The country adopted the US dollar as currency in 2009, following an episode of hyperinflation. The Zimbabwe dollar was reintroduced in 2019 to revive the country’s struggling economy. Last year, however, the government decided to re-introduce the US dollar in order to curb rising prices.
The adoption of cryptocurrencies has increased in many African countries due to economic challenges. Chainalysis reports that the Middle East and North Africa is the fastest growing region for crypto adoption thanks to cross-border remittances, with over $566 billion in crypto transactions between July 2021 and June 2022, a 48% year-over-year increase compared to
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