By ETimes
| The Reserve Bank of Zimbabwe (RBZ) has said the Gold-Backed Digital Tokens (GBDT) will be used for transactional purposes in order to ease payments. RBZ Governor John Mangudya said, “The GBDT are being issued to expand the value preserving instruments available in the economy, enhance divisibility of the investment instruments and widen their access as well as usage by the transacting public.” For transactional purposes, the GBDT will be known as Zimbabwe Gold (ZiG). “In line with the objective to widen access and usage of the instrument, the Bank is expanding the usage of the token from the current investment sphere to enable wider usage for transaction purposes by the public,” the Governor added. According to the central bank, it has conducted 12 issuances of GBDT as of August 4, 2023, receiving a total of 605 applications to purchase tokens valued at $51,8 billion and US$10,995. The central bank, therefore, issued 329,118,729 milligrams equivalent to 329.1 KGs of gold. For ease of use the pricing of the ZiG in foreign currency shall remain the same as the pricing model of the GBDT as guided by the international gold price determined from the London Bullion Market Association (LBMA) PM fixSince it is denominated in milligrams, ZiG transaction limits, charges and settlement will be conducted in milligrams. Mangudya said, “The first issuances were undertaken through the Central Securities Depository (CSD) system and banks advised their customers of their allotments. Going forward, issues will be undertaken through the RTGS system.” In the same vein the RBZ said it has already opened accounts for settlement by all the participating banks on the RTGS system. Participating banks are expected to enable ZiG in customer accounts, cards and POS transactions as well as online channels. The cards will hold milligrams reflected in the ZiG account of the holder. These milligrams will be tradable and capable of facilitating Person-to-Person (P2P) and Person-to-Business (P2B) transactions. According to the bank, these transactions will be cleared through the National Switch (Zimswitch) and settlement on the RTGS system. Banks are however not allowed to lend ZiG as well as earn interest as the central bank will be the only issuing bank of the currency.“ZiG shall only be issued by the Reserve Bank of Zimbabwe. Banks shall not be allowed to lend ZiG. In addition, ZiG is not going to earn interest. The level of ZiG in the market will only change following issuance or redemption by the Bank,” the governor added. For customers who hold physical gold coins can elect to tokenise them and that process can be undertaken through the secondary market.According to the RBZ, participating banks can, therefore, facilitate where there are investors with gold coins who require ZiG. “Where the banks cannot exchange the physical gold coin, they should approach the Bank after vesting period for redemption and payment in local currency, foreign currency or ZiG,” the bank said. ZiG accounts at financial institutions will run alongside the nostro and local currency accounts. The ZiG account will remain in milligrams and will operate and settle in the same units. “There will be no account maintenance tariffs or charges for ZiG accounts. Financial institutions should price ZiG transactions in a fair, affordable, responsible manner for the benefit of the transacting public,” the governor concluded – Harare |