Zimbabwe's central bank is introducing a gold-backed digital currency to help hedge against its high inflation rate. This new tokenised currency can be exchanged with Zimbabwe currency, allowing people to reseve the money they have in an asset that is not subject to the same rate of inflation. The gold will stay under the control of the central bank, and will be issued physically as coins as well as tokenised.

This concept of tokenised gold is not new, as many cryptocurrencies already exist that have been tied to precious metals. Gold Coin (GLC) and Meld Gold by Algorand (MCAU) are two examples that have been developed by prominent figures in the crypto space. To ensure accuracy and reliability of storage, some blockchain technology providers partner with specialised services and refineries. This also gives individuals the ability to invest in smaller amounts without having to form or handle any physical gold.

In addition, tokenising gold lowers the barriers to entry for people wanting to get involved in gold investment. The use of tokens and technology allow for a more efficient and secure process for gold trading and investing, as well as providing protection against inflationary effects. While inflation in Zimbabwe appears to be worsening, the introduction of gold-backed digital currency should offer some respite to citizens in the form of an investment they can use to shield themselves from currency-level fluctuations in value.



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