Zimbabwe Gold-Backed Digital Token (ZiG) as a Payment: What You Need to Know

On October 5, 2023, Zimbabwe officially adopted its gold-backed digital token, ZiG, as a legal tender for domestic transactions. This marked a significant milestone for the country, as it became one of the first in the world to introduce a central bank digital currency (CBDC) backed by gold.

Introduction of the Zimbabwe Gold-Backed Digital Token (Zig) as a Means of Payment pic.twitter.com/o1CL5dsbaQ

— Reserve Bank of Zimbabwe (@ReserveBankZIM) October 5, 2023

What is ZiG?

ZiG is a digital token that is backed by physical gold held in the reserves of the Reserve Bank of Zimbabwe (RBZ). Each ZiG token represents a specific amount of gold, which can be redeemed at the RBZ at any time.

How does ZiG work as a payment?

ZiG can be used to make payments using a variety of methods, including:

• Point-of-sale (POS) machines: ZiG can be used to make payments at merchants that accept ZiG.
• Online payments: ZiG can be used to make online payments at merchants that accept ZiG.
• Peer-to-peer (P2P) transfers: ZiG can be transferred directly from one ZiG wallet to another.

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Benefits of using ZiG as a payment

There are a number of benefits to using ZiG as a payment, including:

• Stability: ZiG is backed by gold, which is a relatively stable asset. This means that ZiG is less likely to suffer from inflation than other currencies.
• Security: ZiG is a digital token, which means that it is more secure than traditional fiat currencies.
• Convenience: ZiG can be used to make payments using a variety of methods, including POS machines, online payments, and P2P transfers.

Challenges of using ZiG as a payment

One of the main challenges of using ZiG as a payment is that it is still a relatively new currency. As a result, it is not yet widely accepted by merchants. Additionally, the RBZ has not yet released all of the technical infrastructure needed to support daily transactions with ZiG.

Overall, the introduction of ZiG as a payment method is a positive development for Zimbabwe. ZiG has the potential to provide a more stable and secure payment option for Zimbabweans, and it could also help to reduce the country’s reliance on the US dollar.

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