Gold tokens mop up $14bn in first issue

THE Reserve Bank of Zimbabwe (RBZ) says $14 billion worth of gold-backed tokens were allotted at the initial sale held last week.

In a statement, the Apex Bank said it received 135 applications with 132 bids in local currency and three in US$ terms.

The total milligrams of gold purchased were 139 570 982, equivalent to 139,57 kg of gold.

Reserve Bank of Zimbabwe (RBZ)

The RBZ said applications under the second issue of the RBZ gold-backed digital tokens should be submitted through the banks during the course of the week for settlement and issue on the next sale on May 18, 2023.

According to RBZ, the gold-backed tokens are fully backed by physical gold held by the Bank.

The minimum vesting period has been set at 180 days and the digital tokens will be held in either e-gold wallets or e-gold cards tradable also via Person- to-Person (P2P) and Person To-Business (P2B) transactions and settlements.

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 Bank also advised that the pricing of the gold-backed digital tokens in foreign currency shall remain the same as the pricing model of the physical gold coins while payment for the gold-backed digital tokens or physical gold coins in Zimbabwe dollar shall remain at the current 20 percent margin above the interbank mid-rate.

As part of stabilisation measures announced by the Government on Thursday, both digital and physical gold coins have witnessed significant uptake.

The Central Government said, through the RBZ, it shall continue to assure public confidence in both instruments by ensuring that at all times, gold coins and gold-backed digital tokens remain fully backed by physical gold reserves.

Money – Image taken from Pixabay

The economy has seen a resurgence of macro-economic instability, with domestic inflation being driven primarily by the skewed preference for US Dollars as a savings currency.

This has put enormous pressure on the exchange rate as the skewed preferences have continued to increase the velocity of the Zimbabwe dollar.-chronic.elc.zw