The performance of Zimbabwe Gold (ZiG), the new currency derived from a gold-backed token,
Zimbabwe Gold (ZiG), the new currency based on a gold-backed token, has performed well in the foreign exchange market, but has struggled in its domestic market. On June 4, the ZRB announced new measures to combat the currency black market and improve its user-friendliness.
The Reserve Bank of Zimbabwe (ZRB) has made a direct appeal to the public through its X Account, urging them to report illegal currency dealers or businesses that refuse to accept its new currency. This was part of an ongoing effort to combat illegal trading of foreign currencies, sometimes at unofficial rates. According to Bloomberg, ZiG has risen 1.9% against the US dollar since its launch in physical form.
ZiG introduction met with mixed success
On May 15, South Africa-based Crime Watch Zimbabwe reported that Zimbabwe police had arrested 224 illegal foreign exchange traders and that the Federal Reserve Bank’s Financial Intelligence Unit (FIU) had frozen 90 bank accounts and fined 40 people. The financial intelligence unit also monitored banking activity for evidence of ZiG’s illegal transactions.
The organization reported that the crackdown resulted in “a significant reduction in the number of illegal money changers operating in the central business district (CBD) (of the capital, Harare) and its surrounding areas.” Judging by RBZ
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Obviously, the shortage of coins is another problem that concerns the central bank. “The bank is particularly seeking to expand the economy-wide availability of small currencies in the following denominations, ZiG1, ZiG2, ZiG5, ZiG10,” the Fed said in an article published several hours after the post. on illegal traders.
The Fed also said that ZiG funds could be withdrawn from government financial services company Homelink using debit cards in seven cities starting June 10, and that other financial institutions will offer this service in the future. .
ZiG receives mixed reviews
ZiG is Zimbabwe’s sixth currency in 15 years. It is backed by gold and foreign currencies, but started as a digital currency tied to the price of gold. It was released in physical form in April and received mixed reactions from the public.
The gold-backed token, now called GBDT (Gold-Backed Digital Token), has been the subject of suspicion and criticism due to its similarity to a central bank digital currency. GBDT now operates as a separate “investment vehicle” from the current Zig. The use of many foreign currencies is still legal in Zimbabwe.
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