The Central Bank of Zimbabwe is easing the wrinkle with the new currency.
Zimbabwe Gold (ZiG), the new currency derived from a gold-backed token, has performed well in the foreign exchange market, but has faced problems domestically. The ZRB announced new measures on June 4 to combat the black market and improve its use of the funds.
The Reserve Bank of Zimbabwe (ZRB) has appealed directly to the public through its X Account for people to report illegal currency traders or businesses that refuse to accept the new currency. This was part of a series of efforts to combat illegal foreign exchange trading, sometimes at irregular rates. According to Bloomberg, Zig gained 1.9% against the US dollar after going public.
Zig's introduction has had mixed success.
On May 15, South Africa-based Crime Watch Zimbabwe reported that police in Zimbabwe had arrested 224 illegal FX traders and the RBZ's Financial Intelligence Unit (FIU) had frozen 90 bank accounts and fined 40 people. The FIU was monitoring activity in banking services to find evidence of illegal zig trading.
According to the organization, the move has “resulted in a significant reduction in the number of illegal money changers operating in the Central Business District (CBD). [of the capital Harare] and the environment” from the June 4 RBZ X post that the fight continues.
RELATED: Zimbabwe Minister Shows Interest in CBDC Amid Bitcoin Adoption Rumors
Apparently, the shortage of coins is another issue that is worrying the central bank. “The bank specifically wants to make small changes in the following denominations to expand the economy wide supply, ZiG1, ZiG2, ZiG5, ZiG10,” RBZ reported a few hours after it was sent to the Ex Post about illegal traders.
The RBZ also said Zig Money will be available to exit state-owned financial services company Homelink using debit cards in seven cities from June 10, and other financial institutions will offer the service in the future.
ZiG gets mixed reviews
The zig is Zimbabwe's sixth currency in 15 years. Although it is backed by gold and foreign exchange, it started as a digital currency linked to the price of gold. It was introduced in April and received a mixed response from the public.
The gold-backed token, now called GBDT (Gold-Backed Digital Token), has received skepticism and criticism for its resemblance to a central bank digital currency. GBDT now functions as an “investment tool” separate from the physical Zig. Several foreign currencies are still legal for use in Zimbabwe.
Magazine: Bitcoin in Senegal: Why is this African country using BTC?
