International Monetary Fund
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The International Monetary Fund warned Zimbabwe against introducing a gold-backed digital asset to stabilize its economy against the volatile US dollar, expressing fears that this digital asset, similar to cryptocurrencies, could hinder the current economic system in the African country.
The International Monetary Fund, according to the “Bitcoin News” website today, Saturday, called on the Zimbabwean monetary authorities to carefully study the benefits of issuing a gold-backed digital currency against the potential risks of this step to the economy.
The global lender suggested the authorities “consider liberalizing the country’s foreign exchange market, rather than rushing to issue gold coins.”
This came just days after the Reserve Bank of Zimbabwe began issuing the gold-backed digital currency, in an effort to slow domestic demand for US dollars and combat inflation, Bitcoin News revealed earlier.
According to Zimbabwe’s plans, the South African country is looking to allow small denominations of the Zimbabwean dollar to be exchanged for the digital gold token to protect its investments from market volatility.
IMF authorities have approached Zimbabwean regulators, proposing to avoid mixing cryptocurrency-like digital assets into its financial system.
In turn, sources within the fund said: “A careful assessment must be made to ensure that the benefits from this procedure outweigh the costs and potential risks including, for example, macroeconomic and financial stability risks, legal and operational risks, governance risks, and the cost of losing foreign exchange reserves.” “.