In a bold move defying the International Monetary Fund (IMF)’s caution, Zimbabwe’s Reserve Bank has successfully completed its maiden sale of gold-backed crypto tokens. The African nation’s central bank traded digital tokens to the tune of 14 billion Zimbabwean dollars (approximately $39 million) from May 8 to 12, brushing off the IMF’s skepticism about its crypto initiative.
The crypto tokens, dubbed e-gold, were launched in April, backed by a hefty 139.57 kilograms of gold. Investors from all walks of life showed interest, with the bank receiving 135 applications to buy the digital currency. The tokens were sold at a minimum price of $10 for individuals and $5,000 for corporations, which can be kept safely in e-gold wallets or e-gold cards.
The sale is part of Zimbabwe’s grand plan to stabilize its wavering economy and fight the continued depreciation of the local currency against the US dollar. With an eye on further boosting the economy, a second round of digital token sales is already on the horizon, with applications to be settled by May 18.
However, the IMF has expressed reservations about Zimbabwe’s gold-backed crypto plan, arguing for a liberalization of the foreign-exchange market instead. They cited concerns over potential risks including macroeconomic and financial stability, legal and operational issues, governance risks, and cost of lost foreign exchange reserves.
Zimbabwe, which has grappled with currency volatility and inflation for over a decade, reintroduced its local currency in 2019 after a period of hyperinflation which saw the country adopting the USD as its currency in 2009. This bold move of leveraging cryptocurrency demonstrates Zimbabwe’s continued efforts to revive and stabilize its economy.