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Buying RBZ's Gold-Backed Digital Tokens; Here Is What You Need To Know

1 year agoMon, 08 May 2023 10:26:35 GMT
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Buying RBZ's Gold-Backed Digital Tokens; Here Is What You Need To Know

The Reserve Bank of Zimbabwe (RBZ) said it will start selling gold-backed digital tokens on Monday, 08 May 2023.

Individuals and institutions intending to buy the digital tokens can get the application forms from the RBZ, commercial banks, building societies and the People’s Own Savings Bank (POSB).

Completed application forms should be submitted through Commercial Banks, Building Societies and the POSB.

The offer opens on Monday, 8 May 2023 at 0800 hours and closes on Wednesday, 10 May 2023 at 1200 hours.

The payment date is Thursday, 11 May 2023, and the Gold-Backed Digital Tokens will be issued on Friday, 12 May 2023. Said the RBZ:

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The digital tokens will be issued for investment purposes with a vesting period of 180 days and redeemable in the same way as the existing physical gold coins.

The digital tokens will be available for sale, through banks, in both foreign and local currency.

Banks will create dedicated or specific accounts for the holding of the gold-backed digital tokens (e-gold wallets or e-gold cards).

Holders of physical gold coins, at their discretion, will be able to exchange or convert, through the banking system, the physical gold coins into gold-backed digital tokens.

The central bank also said the old-backed digital tokens will be used as a means of payment and a store of value. It said:

The digital tokens held in either e-gold wallets or e-gold cards will be tradable and capable of facilitating Person-to-Person (P2P) and Person-to-Business (P2B) transactions and settlement.

It, therefore, means that the gold-backed digital tokens would be used both as a means of payment and a store of value.

In terms of pricing of the tokens in foreign currency, the RBZ said it shall remain the same as the pricing model of the physical gold coins as informed or guided by the international gold price as determined by the London Bullion Market Association (LBMA) PM fix.

The LBMA Gold Price is the internationally recognised benchmark price for gold delivered in London
Set twice daily (at 10:30 and 15:00 London UK time) in US dollars per troy ounce.

The RBZ said the payment for the digital tokens or physical gold coins in local currency shall be at a 20% margin above the willing-buyer willing-seller interbank mid-rate.

Applications for digital tokens will be through banks, building societies and the POSB and must be for a minimum of US$10 and US$5 000 for individuals and corporates and other entities (including financial institutions), respectively.

The central bank said it reserves the right to accept or reject any application or part made by individuals and corporates and other entities.

It said the full payment for allotted digital tokens shall be made on the settlement date through the normal payment systems.

However, individuals and entities cannot use borrowings to finance the purchase of the digital tokens.

The RBZ said the Financial Intelligence Unit shall take appropriate action in respect of any suspicious sources of funding.

The digital tokens will be issued in milligrammes, which is one-thousandth of a gramme, through the custodian banks within the Central Securities Depository payment system.

More: Pindula News

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