WORK around the finalisation of gold-backed digital tokens has reached an advanced stage with the government's legal team working on the final touches to provide a sound legal basis for the instrument's inception.
In an update recently, the Reserve Bank of Zimbabwe (RBZ) announced that the digital tokens over and above the already existing gold coins set to be rolled out on May 8.
The move is meant to enhance the divisibility of the investment instruments and widen their access and usage by the public.
The clarification on legal work around the tokens clears the air following market speculation indicating that the instrument is being introduced without establishing the required legal framework.
In a tweet over the weekend Citizens Coalition for Change (CCC) spokesperson, Fadzayi Mahere said the introduction of the gold-backed digital tokens contravenes the Reserve Bank Act.
"What kind of "Reserve Bank" introduces a new "digital currency" with absolutely no legal framework whatsoever? What are the rules? Who made them? This move is illegal and ultra vires the Constitution and the Reserve Bank Act. No wonder the Zimbabwean Dollar is crashing," Mahere said on Twitter.
But a highly placed anonymous source in the Finance and Economic Development Ministry dispelled the speculative fears insisting there is no way such a huge step can be taken outside legal provisions.
"The legal framework for the introduction of digital gold tokens is almost complete. What the authorities have done is simply to advise the market in advance to the effect that the introduction of the product will commence on May 8.
"The forthcoming legal framework is consistent with international best practices and will augur well with the Supreme Law of our land. Hopefully, the legal framework would be approved before the rollout of the tokens' first phase," said the source.
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Last Friday, RBZ revealed that phase one: gold-backed digital tokens will be issued for investment purposes with a vesting period of 180 days and redeemable in the same way as the existing physical gold coins. The tokens will be available for sale, through banks, in both foreign currency and Zimbabwe dollars.
During the second phase, the gold-backed digital tokens held in either e-gold wallets or e-gold cards will be tradable and capable of facilitating person-to-person and person-to-business transactions and settlements implying that the gold-backed digital tokens would be used both as a means of payment and a store of value.
Authorities believe that the tokens will allow gold coins to be widely traded and, in the process, expand tradable assets in the economy for store-of-value purposes, increase divisibility and shore up the local Zimbabwe dollar currency.
