The Zimbabwean economy is no stranger to hyper-inflation. In 2009, the country adopted the USD as an official alternative to their local currency which helped to stabilize prices for a while.
The economy in the landlocked nation in the southern zone of Africa is based on natural resources and the country’s largest export is gold. In a sense, the economy of Zimbabwe is like a canary in a coal mine and can give investors of a sense of the direction things are heading at home.
Inflation set in again in recent years and the country’s leaders are looking to step away from the USD in favor of gold. The initial launch of the country’s gold-backed digital currency The token’s initial offering is backed by 140 kilogram gold bars that have been allocated from central bank reserves.
The offering Zimbabwe caused a ruckus with some international lenders, with the IMF issuing a statement reminiscent of the outrage posited against El Salvador when it established bitcoin as a legal currency began issuing bitcoin bonds.
A major announcement about a gold-backed basket currency is expected from the BRICS conference in South Africa in August. The BRICS gold-backed currency will offer emerging nations greater opportunities to flourish without being dependent on the dollar currency for settling cross-border transactions.