Saturday, June 22, 2024

Zimbabwe: Central Bank Clarifies Gold-Backed Digital Currency Legalities – Invites Subscribers

The Reserve Bank of Zimbabwe (RBZ) has clarified the legal framework for the inception of tokenized gold coins adding that trade in the instruments will be under strict regulations.

The Gold backed digital tokens are being issued with the objective to expand the value preserving instruments available in the economy, enhance divisibility and widen their access and usage by the public amid expectations that the Zim$ vitalities in the parallel market will be contained.

A Prospectus published by the RBZ this week says the instrument is covered by provisions in the RBZ Act.

“The Gold Backed Digital Tokens are issued in terms of with the provisions of sec 7 (d) of the RBZ Act (Chapter 22:15) which empowers the bank to buy, sell, discount or re-discount bills of exchange and promissory notes drawn or issued for commercial, industrial or agricultural purposes and Bills notes and other obligations issued by itself”.

“The issue is also in line with Section 47 (3) of the Act that gives the bank the discretion to buy, sell and hold gold and foreign exchange assets for the purpose of maintaining the value of the Zimbabwe dollar and for such other purposes as it considers necessary or expedient,” the document said.

The central bank said the instruments will be available for sale, through banks, in both foreign and local currency while banks are expected to create dedicated accounts for the holding of the gold backed digital tokens known as e-gold wallets or e-gold cards.

The digital tokens held in either 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 will be used as both a means of payments and a store of value.

Applications from individuals, Financial Institutions, Corporates, and other Entities to subscribe for the issuance of digital tokens for a minimum of US$10 for individuals, US$5 000 for financial institutions, corporates and other entities were also invited.