Zimbabwe defies IMF warning to sell millions of gold-backed crypto tokens

The Reserve Bank of Zimbabwe's first sale of a gold-backed cryptocurrency has been a success.

Despite warnings from the International Monetary Fund, the Reserve Bank of Zimbabwe has sold 14 billion Zimbabwean dollars worth of gold digital tokens — worth about $39 million.

On May 12, the Central Bank of Zimbabwe announced that it had received 135 applications totaling 14.07 billion Zimbabwean dollars to purchase gold-backed cryptocurrencies.

According to XE.com, the official exchange rate for the Zimbabwean dollar to the U.S. dollar is 362 Zimbabwean dollars — but much higher on the street — giving the collection a notional value of about $38.9 million.

The crypto tokens, which were first launched in April and backed by 139.57 kilograms of gold, will be sold from May 8 to May 12.

The tokens will be sold for as little as $10 for individuals and $5,000 for companies and other entities. Tokens have a minimum vesting period of 180 days and they can be kept in an e-gold wallet or e-gold card.

The move is reportedly part of efforts to stabilize the country's economy and the local currency's continued depreciation against the dollar.

A second round of the digital token sale will be held, and the bank has asked for applications to be submitted this week and closed by May 18. According to local media reports, RBZ Governor Dr John Mangudya commented:

“The issuance of gold-backed digital tokens aims to expand the store of value instruments available in the economy, enhance the divisibility of investment vehicles, and expand public access and use of them.”

The move comes after the IMF warned about the African nation's plans for a gold-backed currency, arguing that it should open up its foreign exchange market, Bloomberg reported on May 9.

"A careful assessment should be carried out to ensure that the benefits of this measure outweigh the costs and potential risks, such as macroeconomic and financial stability risks, legal and operational risks, governance risks, costs of forgoing foreign exchange reserves," an IMF spokesman told Bulletin. lomberg.