Economists say Zimbabwe’s gold-backed digital token won’t solve currency problems.

Zimbabwe’s central bank recently issued a gold-backed digital token, which they hope will stabilize the country’s local currency. However, economists are skeptical that this will be effective. Zimbabwe has been struggling with hyperinflation for years, and experts believe that the real problem is the growth of money supply. The gold-backed digital token may offer short-term benefits, but it cannot reduce the amount of money circulating in the economy without strong macroeconomic policies in place. The RBZ hopes that the token will help address the demand for a store of value and reduce reliance on the U.S. dollar, but experts say that it cannot be the solution on its own. The token’s slow uptake is already an indication that it is powerless to tackle hyperinflation.

To address Zimbabwe’s local currency crisis, Chitambara and Paul suggest implementing sound policies. Paul emphasizes the importance of good macroeconomic management. Chitambara notes that the Reserve Bank of Zimbabwe (RBZ) has implemented restrictive monetary policy to reduce the amount of money in circulation while keeping fiscal policy expansionary. This has led to continued public spending despite the RBZ’s attempts to control the money supply. Chitambara argues that Zimbabwe’s gold-backed digital token won’t stabilize the local currency, as the solution is to control money supply growth. Last year, the RBZ announced plans to double spending but raised interest rates to 150% as a countermeasure. Some economists suggest abolishing the local currency entirely, but the government opposes this. The International Monetary Fund (IMF) is unsure about the effectiveness of the digital token initiative and requires more information to assess its efficacy. Chitambara’s solution is to “not spend what you don’t have.” Edited by Sandali Handagama.

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!


Was this article helpful?

93 out of 132 found this helpful

Discover more


Michael Saylor's Bitcoin billions rebounded after he left the CEO position a year ago.

BTC's price has surged to approximately $29,000, marking a significant increase from its value of less than $23,000 i...


Braiins Introduces Lightning Payouts: A Landmark Move for Bitcoin Mining

Miners utilizing Braiins now have instant access to bitcoin rewards, without any minimum requirements or fees - makin...


Grayscale’s Bitcoin ETF Sees Record Low Outflows, While Other ETFs Experience High Inflows

Grayscale's Bitcoin ETF (GBTC) saw a net outflow of $22 million, the lowest since its conversion, while Bitcoin ETFs ...


Bitcoin Rallies Past $52,000: Bulls Take Charge Once Again!

Bitcoin enthusiasts are back in control as the world's top cryptocurrency experiences a significant increase, crossin...


TRB extreme negative fees will it continue to soar or is it on the verge of collapse?

There is a possibility that the price of TRB will continue to rise to $110-130 in the short term. However, a sudden d...


Bitcoin price may surge next month if the 200-week trendline remains intact.

Bitcoin on-chain metrics indicate a strong bullish trend for BTC price in September, according to analyst Cole Garner.