- The Reserve Bank spent 140 kg of gold to back coins
- And announced a new token sale
- The IMF warns that this is a direct threat to the state treasury
Zimbabwe spent about 140 kg of gold reserves to secure and conduct the first sale of their digital money. This project is designed to reduce the dollar dependence of the African country.
The central bank reported that it received 135 applications for the purchase of gold-backed tokens. Their total amount was 14 billion Zimbabwean dollars ($12 million). The authorities do not stop and are preparing a second auction for May 18.
Criticism of the IMF
The International Monetary Fund (MBF) has harshly criticized Zimbabwe’s actions. They fear that such sales are depleting the country’s foreign exchange reserves. The IMF authorities carefully weigh the benefits and risks of a digital currency backed by gold.
“Instead of rushing to release “gold” tokens, local officials should consider the possibility of liberalizing the country’s foreign exchange market”
Over the past year, the Zimbabwean dollar has depreciated by half. The Central Bank decided in response to raise the interest rate, as well as to sell gold from the treasury. They issued both physical and tokenized gold coins. Both assets, according to the central bank, will serve as an alternative store of value.
Argentina is also struggling with high inflation. But they decided, on the contrary, to tighten control over cryptocurrency operations.