Zimbabwe Gold (ZiG), a new currency that emerged from a gold-backed token, has experienced success in the foreign exchange market but has faced challenges domestically. To address these issues, the Zimbabwe Reserve Bank (ZRB) announced new measures on June 4 to combat the black market and enhance the usability of the currency.
In an effort to crack down on illegal foreign exchange trading, the ZRB directly appealed to the public through its X account, encouraging them to report illegal currency traders or businesses that refuse to accept ZiG. This move followed previous actions taken by the ZRB, including the arrest of 224 illegal FX traders and the freezing of 90 bank accounts by the RBZ Financial Intelligence Unit (FIU), as well as the imposition of fines on 40 individuals. The FIU also monitored bank services to uncover evidence of illegal ZiG transactions.
According to Bloomberg, since its introduction in physical form, ZiG has gained 1.9% against the United States dollar. However, the introduction of ZiG has been met with mixed success. A report from South African-based Crime Watch Zimbabwe revealed that the crackdown on illegal money changers led to a significant decrease in their operations in the Central Business District (CBD) of Harare. Nevertheless, based on the RBZ X post on June 4, it is evident that the struggle against illegal traders persists.
In addition to combating the black market, the ZRB is also facing challenges related to the availability of coins. The RBZ addressed this issue in another X post, stating its intention to expand the availability of small change in denominations of ZiG1, ZiG2, ZiG5, and ZiG10. The RBZ also announced that ZiG cash would be obtainable for withdrawal from the government-owned Homelink financial services company using debit cards in seven cities starting from June 10, with other financial institutions expected to offer the service in the future.
The ZiG currency, which is Zimbabwe’s sixth currency in 15 years, is backed by gold and foreign currency. It initially started as a digital currency linked to the price of gold but was later introduced in physical form in April. The public’s response to the currency has been varied, with some expressing doubts and criticism due to its similarity to a central bank digital currency. Currently, several foreign currencies are still accepted as legal tender in Zimbabwe.
As Zimbabwe navigates its currency landscape, there is also growing interest in cryptocurrencies like Bitcoin. Senegal, for example, has embraced Bitcoin for various reasons, highlighting the potential of digital currencies in African countries.