Digital Gold Tokens Working Well - Mangudya
Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya said that gold-backed digital tokens that were introduced last week are working well as 140 kilogrammes of the tokens valued at more than ZWL$14 billion were taken up by the market.
The central bank says it has sold 31 866 Mosi-oa-Tunya gold coins since their introduction last year for ZWL$25.8 billion.
Mangudya told The Sunday Mail that the huge demand for gold coins and digital tokens could help remove excess liquidity and stabilise the Zimbabwe dollar. He said:
The purpose of digital gold tokens, just like the physical gold coins, is to store value, act as an investment tool and mop up excess liquidity from the market.
The reason the parallel market exchange rate goes up is that we are a dual-currency economy.
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In a dual-currency economy, where there is a local currency and the US dollar, many will obviously find the US dollar as the most attractive.
By providing digital gold tokens, we are saying do not go to the parallel market, but store value in the coins and tokens, which are known worldwide as a store of value.
Therefore, it is working very well, because the demand for the gold coins is higher than the supply, while the electronic version is actually working very well.
About $14 billion was used to purchase digital gold tokens.
That money could have gone into the parallel market but was not channeled there and was used to buy digital gold tokens. So, it is working.
The gold tokens are being introduced in two phases.
The first phase entails issuing gold tokens with a vesting period of 180 days for investment purposes.
The second phase involves issuing gold-backed digital tokens held in either e-gold wallets or e-gold cards being tradable and capable of facilitating person-to-person transactions.
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