Zimbabwe’s Central Bank has announced plans to introduce a gold-backed digital currency that will serve as legal tender in the country. The move aims to stabilize the local currency, which has been continuously depreciating against the US dollar.
According to reports, small amounts of Zimbabwean dollars will be exchanged for digital gold, allowing more Zimbabweans to hedge against currency volatility.
Governor of Zimbabwe Supports This Move
The Reserve Bank of Zimbabwe Governor John Mangudya has stated that the plan aims to leave no one and no place behind.
Meanwhile, in the United States, the Treasury and several top financial regulators have proposed new rules to make it easier for the Federal Reserve to designate non-bank institutions as systematically important.
This move will make it easier for regulators to supervise and regulate such institutions. U.S. Treasury Secretary Janet Yellen has expressed concerns over the lack of supervision of non-bank financial institutions and the potential for wider financial contagion when these firms suffer through periods of distress.
How Does This Connect to the Plan in Zimbabwe?
Well, let’s back up a bit and address the local currency of Zimbabwe and what it did to get where it is now.
The country’s local currency is among the most volatile in the world. A year ago, 1 U.S. dollar was worth around 150 Zim dollars. Today, that figure is closer to 1,000 Zim dollars.
In response, Zimbabwe’s central bank has made clear its plans to use gold reserves to anchor the Zim dollar. One of their strategies involves releasing gold coins into the market.
Now, it plans to release gold-backed digital tokens in order to allow those holding small amounts of the local currency to exchange their money for the token.
The digital tokens are backed by gold held in physical forms by the RBZ. Monetary authorities see this as an opportunity for Zimbabweans to ‘store value and hedge against volatility.’
Gold Will Be Used Instead of the US Dollar
In the past, locals have used the US dollar as a store of value. But the supply of foreign currency has been low, notes RBZ Governor Dr. John Mangudya. So they are offering gold coins as an alternative.
Zimbabwe’s move to create a gold-backed digital currency is a confirmation of a historical fact—gold is the most stable investment. The value of gold tends to remain stable and will always adjust itself to match the inflation rate. Therefore, investing in gold or gold instruments is one of the safest investment decisions anyone can make.
This is the message that Zimbabwe is sending out to its people and, by extension, the world. So, a lot of investors are looking for ways to invest in gold and other alternative assets.
And it just so happens that HedgeUp (HDUP) lets people invest in gold-backed blockchain assets.
The HedgeUp (HDUP) project is building a platform that lets people trade NFTs backed by gold, diamonds, luxury watches, and other alternative assets. Users can invest in gold simply by buying an NFT on the platform.
Want to Invest in HedgeUP?
HedgeUp (HDUP) is still a young project. It is currently in its presale phase, where (HDUP), the platform’s internal currency, is available for a discounted price of $0.013.
That means that there is plenty of room for new and fresh investment in a nation that is prioritizing innovation and digital assets.
Something that, as crypto enthusiasts, we can all get behind and support with great comfort, knowing that we are helping another nation and people develop with blockchain technology in the heart, mind, and currency.