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Tag: Digital Currency

  • Zimbabwe set to introduce gold-backed digital currency

    Zimbabwe set to introduce gold-backed digital currency

    Zimbabwe is planning to launch a gold-backed digital currency, according to a story in the state-run Sunday Mail citing John Mangudya, the governor of the country’s central bank. 

    According to the journal, the gold-backed tokens will operate as hedges against continuous currency instability and as a more effective store of value than the Zimbabwe dollar.

    The monetary policy committee endorsed the plan for a gold-backed digital currency last month. The country’s Reserve Bank has previously issued gold coins as alternative legal tender. 

    Gold is seen as an extra layer of protection during economic turmoil and a hedge against inflation, which in Zimbabwe reached 230% in February.

    The central bank intends to create additional “Mosi-oa-tunya” gold coins as well as digital tokens, with the hope that both currencies would be more dependable repositories of value than the fragile Zimbabwe dollar. 

    According to Innocent Matshe, the Reserve Bank of Zimbabwe’s deputy governor, the central bank is finalising a date for the launch of the gold-backed digital currency.

    “What we have noticed is that demand for foreign currency, apart from being driven by the need to import goods and services in Zimbabwe, is also viewed as a store of value,” RBZ governor Mangudya told the Sunday Mail. 

    Read also: Nigerian foreign investment in cryptocurrency decreases

    Zimbabwe needs $100 million of gold to kick-start its plan

    “We are addressing this demand for a store of value by increasing the number of gold coins in the market so that we can manage that demand.” We will also be launching digital gold tokens shortly to guarantee that individuals with limited local money may acquire gold units, ensuring that no one and no area is left behind,” he said.

    However, Bloomberg reported on April 24 that Zimbabwe needs $100 million in gold to launch its planned bullion-backed digital currency as the southern African country tries again to stabilise its faltering dollar.

    According to Persistence Gwanyanya, a member of the central bank’s monetary policy committee, the central bank would depend on gold reserves that it has been building to support the programme and reduce the volatility of the local currency. 

    “Any amount around or less than $100 million will be able to deal with our challenge in a big way,” Gwanyanya said by phone from Harare on Monday. “We expect the central bank to bring a respectable quantity that can stabilize the Zimbabwe dollar and boost demand.”

    The country had 350 kilograms of gold in reserves.

    Since the US dollar is the de facto currency of trade in Zimbabwe, the country has been fighting a losing battle to keep its currency stable. With the implementation of a regulation last year that mandates miners pay a portion of royalties in cash and metal, the central bank has been accumulating gold reserves and has begun to acquire other valuable minerals as well. It’s hoping that the proceeds will help it pull off its current plan.

    Earlier this month, state-run media quoted central bank governor John Mangudya as saying that Zimbabwe has 350 kilogrammes (12,346 ounces) of gold in reserves.

    Zimbabwe aims to raise annual gold output by 14 percent, to 40 tonnes. Data released by Fidelity Gold Refineries, the only refinery in the country, shows that the country earned $377 million from gold output in the first quarter, down from $463 million in the same period a year earlier. 

    “It’s a concept which is pretty straightforward, we tokenize the gold, we have the gold,” said Innocent Matshe, deputy governor of the central bank, over the phone. When we mint coins, we back them with actual gold. The specifics are still being ironed out, but many nations are curious about our plan’s origins. 

    When asked about the price of gold, which would be used to underpin digital money, Matshe declined to elaborate.

  • CBN, ANAACOP Unveil Agro eNaira Digital Currency, Target 5m Farmers

    CBN, ANAACOP Unveil Agro eNaira Digital Currency, Target 5m Farmers

    The Central Bank of Nigeria (CBN) has inaugurated the “Agro eNaira Wallet Engagement” in partnership with the Association of Northern Agricultural and Allied Commodities Practitioners (ANAACOP).

    Five million farmers in northern states are to be enrolled in the programme throughout the dry and wet farming seasons of 2023 to 2024.

    The National President of ANAACOP, Alhaji Sadiq Umar Based user, disclosed this at the Agro eNnaira Wallet Launching in Yola, Adamawa State, over the weekend. 

    He highlighted that the initiative targets one million farmers in the northern states for the first year of the dry and wet seasons in 2023 and the remaining four million farmers for the seasons in 2024.

    Read also: The Central Bank Of Nigeria Unveils USSD Code For eNaira Transactions

    How Farmers Can Enrol For Loans Through Agro eNaira

    Farmers, according to Daware, would create eNaira wallet accounts with a sub-wallet account just for the programmed intervention and submit their information to be eligible for soft loans.

    According to him, 50 farmers from Adamawa’s Ribadu cluster were chosen to test the initiative before it was expanded to the other northern states.

    Daware went on to state that the scheme has chosen agro dealers, processors, and the Central Bank of Nigeria to devise a simplified mechanism of disbursing payments to farmers (CBN).

    He went on to clarify that the project will provide a platform for small-scale farmers to easily obtain loans using their eNaira wallets, emphasising that it would erase any obstacles they had previously encountered.

    Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), complimented the ANAACOP for its efforts, calling it the first of its type to assist local farmers in purchasing farm equipment using their eNaira wallet.

    Emefiele said that the CBN’s brilliant concept of a digital currency, expressed by Hajiya Rakiya Mohammed, Director Information and Communication Technology (ICT) of the CBN, was the first in Africa and the second in the world.

    In his vote of gratitude on behalf of the awardees, Malam Mijinyawa Mahmud asked for additional support for farmers in order to achieve long-term food security and turn the country into a net exporter of raw materials.

    The CBN has stated that adopting the eNaira wallet will help to alleviate the country’s cash scarcity in the middle of the current crisis. Mr Samuel Giwa, the state’s acting CBN Branch Manager, stated that the policy was a CBN strategy aimed at reducing the usage of physical currency in transactions and encouraging the acceptance of digital payments.

    He was speaking at the Palace of the Deji of Akure and Oja Oba Market in Akure over the weekend, lecturing traders and citizens of the state on the need to use a cashless platform for transactions.

    Giwa went on to claim that the policy’s implementation in 2021 will increase financial inclusion, reduce corruption and money laundering, and improve the financial system’s effectiveness.

    The eNaira, he believes, is more than just a currency; it is a critical step towards creating a more stable and secure financial climate.

    “It was designed to make transactions easier, more efficient, and more secure,” stated the CBN Branch manager.

    The eNaira has undoubtedly become an important component of the Nigerian financial ecosystem, as well as an alternative conduit.

    It would benefit not only the Ondo State economy but Nigeria as a whole; it will be a symbol of development and innovation, paving the way for a more safe and efficient financial system.”

    The acting branch manager indicated that the CBN, a regulatory bank with a people-centred objective, was actively trying to solve the challenges currently associated with the currency reform strategy’s execution.

    Yet, in order to aid residents of Akure and Ondo State, he urged them to download the eNaira Quick Wallet in order to make payments for goods and services and have easy access to financial services.

    Mrs Mary Fasheitan, the CBN’s Special Assistant on Payment to the Governor, stated that the CBN organised the sensitization for people to understand all the benefits that the eNaira provides to the banking system while speaking to traders at Akure’s Oja Oba Market.

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    Nigerian Public Figures Reactions to eNaira

    Speaking at the ceremony, Nollywood actor Gabriel Afolayan added that the platform would give Nigerian currency significance beyond only its physical form. He called it a better effort that would make it possible for people to move throughout Nigeria without feeling threatened.

    He urged Nigerians to adopt it and embrace it, calling it a step above simple transactions.

    The Deji of Akure, Oba Aladelusi Aladetoyinbo, praised the alternative forms of payment offered by the CBN in his remarks, but he urged the central bank and DMOs to put in place a dependable and effective infrastructure to make the policy popular with Nigerians and trouble-free.

  • Colombia plans to introduce digital currency to combat tax evasion

    Colombia plans to introduce digital currency to combat tax evasion

    Director of Colombia’s National Directorate of Taxes and Customs, Luis Carlos Reyes (also known as Dirección de Impuestos y Aduanas Nacionales de Colombia or DIAN), has disclosed that the South American nation may launch its own digital currency backed by the central bank (CBDC).

    Reyes spoke on Gustavo Petro, the incoming president of Colombia, and his objectives for monetary policy, including implementing the CBDC to facilitate consumer transactions and combat tax evasion, in an interview with regional news source Semana magazine.

    “This is crucial to enhancing the economy’s ability to track payments made… “People who must pay VAT or income tax on those transactions might evade them when cash transactions are not documented anywhere since it is simpler to create sales that are not recorded,” he said.

    Read: The Explosive Growth of Blockchain Funding and Cryptocurrency in Africa

    According to Semana, no official in the President Petro-led administration, which entered office this month, has previously spoken out in favour of the CBDC. Petro promised that if elected, Colombia would mine bitcoin using renewable energy. He made this promise during his campaigns last year.

    Colombia will join other Latin American nations, such as Brazil, Mexico, and Venezuela, already researching CBDCs. These nations want to begin operating their CBDCs within the following few years, according to the Bank for International Settlements (BIS).

    Colombia’s adoption of digital assets

    Despite the absence of a defined legal framework for the market, the tax office has been harshly prosecuting those who attempt to cheat taxes on digital assets. Investors in digital assets who failed to report their income and complementary taxes on time or filed them incorrectly have been the target of enforcement actions by the DIAN since the beginning of the year.

    Colombia is a pioneer in adopting digital assets in the region and internationally. The Financial Superintendence of Colombia (also known as Superintendencia Financiera de Colombia or SFC), the nation’s financial watchdog, has proposed new rules to regulate the interaction between banks and service providers of virtual assets in response to the asset class’ increasing popularity.

    In accordance with the proposal, banks may only offer banking services to Virtual Asset Service Providers (VASPs) who have registered with the Online Reporting System, and implemented KYC/AML/CFT (Know Your Customer/Anti-Money Laundering/Combating the Financing of Terrorism) measures, and possess the necessary operational and technical capabilities to monitor and report transactions to the central bank.