Reserve Bank of Zimbabwe introduces gold-backed digital currency | The Sunday Mail (4/23/23)
THE Reserve Bank of Zimbabwe (RBZ) is set to introduce a gold-backed digital currency to be used as legal tender for transacting in the country as part of interventions to stabilise the local currency.
Introduction of the digital gold tokens, a form of electronic money backed by gold held at the RBZ, will represent the first steps by the central bank towards using the country’s gold reserves to anchor the Zimbabwe dollar.
Monetary authorities envisage the digital gold tokens will allow those holding small amounts of Zimbabwe dollars to exchange their money for tokens in order to store value and hedge against exchange rate volatility.
The development comes as the RBZ is also mulling releasing more Mosi-oa-Tunya gold coins onto the market to tame the recent depreciation of the Zimbabwe dollar on the parallel market.
RBZ Governor Dr John Mangudya told The Sunday Mail that the parallel market foreign currency exchange rate is expected to begin stabilising when tobacco farmers start receiving their portion of United States dollar payments this week.
The current exchange rate volatility, he said, was caused by “expectations of increased foreign currency supply” on the market when the tobacco marketing season opened in March.
“The movements in the parallel market rate are mainly because of the expectations of increased foreign currency supply in the market when the tobacco marketing season opened,” said Dr Mangudya.
“However, the supply of foreign currency over the past three weeks has been lower than expected. That expectation raised the rates because people thought there will be more money in the market.
“With the start of the tobacco marketing season, most of the funds have been going towards servicing tobacco contractors’ obligations. Now, the money will start flowing into accounts of the growers themselves end of this month; that is when most of them will start receiving their US dollar portions.”
The digital gold tokens, which are representative of gold held in physical form by the issuing authority, are expected to complement the Mosi-oa-Tunya gold coins by offering an alternative investment avenue to store value and transact.
“What we have noticed is that demand for foreign currency, apart from being driven by the need to import goods and services in Zimbabwe, is also viewed as a store of value,” added Dr Mangudya.
“It means anyone with local currency would want to convert it to foreign currency.
“We are addressing this demand for store of value by increasing the number of gold coins in the market so that we manage that demand.
“We shall also soon be introducing digital gold tokens to ensure that those with low amounts of local currency are able to purchase the gold units so that we leave no one and no place behind.”
An increasing number of central banks around the world are starting to develop their own digital currencies, in a development meant to boost financial inclusion, slash payment fees and make money smarter.
Russia is presently working with friendly countries, including Iran and China, to create clearing platforms for cross-border settlements in gold-backed digital currencies in an effort to abolish transactions in fiat currencies like the United States dollar and the Euro.
A new parliamentary talk regarding the date of passing the budget
A member of the Parliamentary Finance Committee, Jamal Cougar, said that the maximum date for approving the budget should be before the end of next month.
Cougar stated, in a statement followed by “Al-Iqtisad News”, that “until now it is not clear when the budget will be approved,” noting that “the matter depends on discussions and discussions with the competent authorities.”
Cougar added, “The maximum date for voting on the budget must be before the end of May.” link
The coordinating framework is preparing to pass it, and deputies are recording their observations.. The budget is at the neck of the bottle
The representative of the “State of Law” coalition, member of the “Coordination Framework”, Muhannad Al-Khazraji, confirmed that the forces of the coordination framework are determined to approve the federal general budget in its current form, indicating that there are some minor amendments that may occur to some paragraphs of the budget, including Consistent with the provisions of the Constitution and the law.
In a press statement, he indicated that “there are desperate attempts by some political blocs to obstruct the approval of the budget in pursuit of personal and partisan projects,” noting that “this budget is one of the largest budgets over the past years because it includes important economic strategic projects that will make a shift.” quality in the field of infrastructure and economic development at the country level.”
He explained that “the forces of the framework and its allies are strongly supportive of the Sudanese government by passing the budget law, which has come to fulfill the ambition of the government program set by the Prime Minister,” noting that “the current budget meets the aspirations of the Iraqis and is consistent with the actual need in developing the economy and maximizing its resources in the country.” .
In the context, a member of the “State of Law” coalition, MP Muhammad Hassan Al-Shammari, confirmed that Parliament had received parliamentary remarks regarding the 2023 draft budget, pointing out that he intends to send it to the government for consideration.
He told the official agency, “The representatives presented all their observations regarding the budget after the second reading took place, and now work is underway in the Parliamentary Finance Committee to complete and complete all the proposed observations and amendments and send them to the government.”
He added, “Scheduling the notes may take until the end of next May, and then the government will review these notes before returning the text of the budget to Parliament in preparation for a vote on it,” explaining that “Parliament has notes on the budget, including the lack of governorate allocations, as they amounted to two trillion Only half a billion dinars, and the fact that the emergency support law allocated 8-10 trillion dinars to the governorates, and we believe that the government is waiting to spend it before allocating other sums.
He pointed out that “there are other observations regarding the allocations of the Martyrs Foundation, whose tasks have expanded and we believe that they need to be increased,” noting that “the representatives have observations regarding the total deficit of 64 billion, and it must be reduced by making transfers with some items.”
He pointed out that “the best way to increase oil imports and address the deficit is to renegotiate to restore Iraq’s share that was reduced due to wars and previous circumstances, and we acknowledge that the issue is difficult and we stress the government’s need to continue to claim rights in OPEC because Iraq’s capabilities and share are supposed to be greater than the current one.” link
Source: Dinar Recaps
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