Should this continue, the gold-backed ZiG will become a stable currency, slowing the dollarisation of the economy. ZIMCODD explained that from now on, ZiG’s money supply growth will only be limited to the growth of RBZ’s reserve asset holdings. In theory, this arrangement could restrict the ability of authorities to print ZiG willy-nilly. In accordance with the new monetary policy framework, the RBZ has adjusted the Bank policy rate from 130% to 20% annually. ZiG banknotes and coins will be issued in denominations of 1ZiG, 2ZiG, 5ZiG, 10ZiG, 20Zig, 50ZiG, 100ZiG, and 200ZiG.
However, due to extreme inflation rates, the government introduced a multi-currency system, allowing foreign currencies to be used alongside the local currency. The gold-backed digital tokens will be a form of electronic money backed by Zimbabwe’s gold reserves, held by the Central Bank. At rhe moment you can only buy digital gold tokens by applying to the RBZ. However the modalities for allowing peer to peer transactions are being finalized by the RBZ and other stakeholders. The specific launch date for ZIG has not been provided in the information provided but it seems imminent, the RBZ is currently testing.
After the previous notorious collapse of the Zimbabwean currency, the country switched to the U.S. dollar in 2009. Banks must convert Zim dollar accounts into ZiG accounts, and new ZiG notes will enter circulation on April 30. However, from what we gathered, it does not appear as if there will be any need for the wallets or cards.
Ethereum and other altcoins also offer unique features, such as smart contracts and decentralized applications (dApps). The introduction of the new digital currency is a significant step for Zimbabwe, which has struggled with hyperinflation that reached a staggering 5 billion per cent in 2008, wiping out the savings of many people in the country. In response, the government temporarily scrapped its currency and allowed the US dollar to be used as legal tender. As you can see from the chart, Zimbabwe is once again dealing with rampant inflation. The value of ZIG is linked to the price of gold, but it exists and operates as a digital asset rather than a physical banknote or coin.
It’s rise to popularity can be attributed to the impressive number of cryptocurrencies they offer, professional attitude, friendly and transparent CEO, and low trading fees. Amid these economic challenges, analysts have questioned whether Harare has enough reserves to adequately back the new currency, and if the latter could suffer from volatility in gold prices. Despite challenges like inflation and currency volatility, cryptocurrencies are likely to continue growing in Zimbabwe. As the government becomes more familiar with blockchain technology, regulations may become clearer, potentially creating a more conducive environment for cryptocurrency adoption.
On 5 April 2017 however, BitMari, a Pan-African Blockchain platform got licensed, through its banking partner, AgriBank, to operate in the country. Leaving your coins on an exchange poses a security risk as many exchanges are targets for hackers to steal user funds. Storing your own coins on your personal hardware wallet mitigates that risk.
