Digital Currency Is Coming To Zimbabwe

 Another African country is trying to break out of financial quagmire:

Zimbabwe will launch a digital currency next month by introducing “tokens” that are backed by gold reserves and can be transferred between people and businesses as a form of payment, the country’s central bank said Friday.

The move is aimed at shoring up Zimbabwe’s faltering national currency, the Zimbabwe dollar, which is fast depreciating amid yearslong economic woes in the southern African nation.

The Bahamas, Jamaica and Nigeria have already launched digital currencies backed by their central banks, with several other countries, including China, running trial projects. The United Kingdom is moving closer to it by asking for public input on the idea. The U.S. and European Union are considering similar moves.

In Zimbabwe, the new tokens “will be fully backed by physical gold held by the bank” and will go into circulation on May 8, Reserve Bank of Zimbabwe Gov. John Mangudya said. People can buy the tokens and use them as a way to save their money or conduct “person-to-person and person-to-business transactions and settlements,” Mangudya said.

People will be able to buy the tokens through banks and make transactions using “e-gold wallets or e-gold cards” held by banks, he said.

Trust in Zimbabwe’s currency is desperately low after people in 2008 had their savings wiped out by hyperinflation, which reached 5 billion percent, according to the International Monetary Fund, nearly a world record.

Between the country's dealing with the IMF and growing relationship with both Russia and China, let's hope Zimbabwe can break the cycle and reach their potential.