Zimbabwe is set to introduce a gold-backed digital currency today. Photo: TSVANGIRAYI MUKWAZHI/ASSOCIATED PRESS

Zimbabwe is today set to begin selling gold-backed digital tokens.

The digital currency will be sold to investors at a minimum price of $10 for individuals and $5,000 for corporations. Plans to launch a digital currency in Zimbabwe were announced by the Reserve Bank of Zimbabwe in April.

Trust in the Zimbabwe dollar is at an all-time low due to struggles with economic woes and hyperinflation. In 2019, the government reintroduced a Zimbabwean currency and banned the use of foreign currencies, including the US dollar. The ban on the dollar was eventually lifted as individuals continued to purchase the currency on the black market, further devaluing the local currency. In another unsuccessful attempt to rein in inflation, Zimbabwe sold gold coins to the public.

The new currency comes as several countries distance themselves from the US dollar. Other countries like Brazil and Argentina have considered a common currency to reduce their reliance on the US dollar. India and Malaysia have made a similar decision to trade in the Indian rupee. Despite previous struggles with ‘new’ currencies, acceptance of the digital currency is likely due to relatively high smartphone penetration in Zimbabwe. In cross border transactions however, the US dollar will likely continue to dominate.