Gold Backed Digital Tokens (GBDT) to remain functional

The Reserve Bank of Zimbabwe has assured the investing public that their endowments in the Gold Backed Digital Tokens (GBDT) will not be converted to the new ZiG currency.

Presenting the 2024 Monetary Policy Statement last Friday, the newly installed RBZ governor Dr John Mushayavanhu, reiterated that the tokens changed their name but the functionality is still the same.

“On conversion of all current local currency balances, banks are directed to rename all the current ZWL accounts as ZiG accounts. Gold-backed Digital Token (GBDT) accounts will no longer be called ZiG accounts but will be known as GBDT accounts,” he said.

The digital coins were mainly bought for hedging inflation and as an investment asset that people have stored their values in.

“The gold coins and GBDTs shall continue to be used as investment instruments and to manage liquidity in the economy to ensure a stable exchange rate. In this regard, the issuance of both higher and smaller denominations of gold coins will continue as an open-market-operation investment instrument for value preservation,” said Mushayavanhu.

The bank continued to use value preservation instruments, which included gold coins and Gold-Backed Digital Tokens (GBDTs) to manage liquidity.

According to the central bank statistics, a total of 39 103 gold coins of various denominations with a cumulative value of $63.47 billion and US$0,8 million, had been sold as of March 31, 2024 and the bulk of gold coin sales (78 percent) were taken up by corporates while individuals accounted for 22 percent.

Investors who had invested in the gold coins, a total of 1 624 were redeemed by customers between January 25, 2023 and March 31, 2024.

Of the total coins sold, 1 447 were valued at US$2,46 million, while 177were sold for $700,4 million.

“To increase the divisibility and affordability of gold coins, the Bank introduced Gold-Backed Digital Tokens (GBDT) measured in milligrams, which is one hundredth of a gramme and the bank is currently issuing Gold-Backed Digital Tokens on tap basis,” said Mushayavanhu.

According to the RBZ statistics, as of March 31, 2024, a cumulative total of 1 163 applications were processed, purchasing tokens valued at $466.99 billion and US$5 million.

The cumulative total amount of gold purchased was 917 278 972 milligrammes which is equivalent to 917.2814 kg of gold.

As of March 31, 2024, a total of 69 949 215 GBDT had been redeemed at a value of US$4,146 million and $1,6 billion. This represents under 10 percent of the total GBDT issued, a reflection that most of the instruments were purchased as a store of value.-ebusinessweekly