Starting on July 25, the Zimbabwean public will be able to buy and hold gold coins which weigh one troy ounce each. In addition to their use as an alternative store of value, the central bank says the coins can be traded and used as “security for loans and credit facilities.”
Coins to Be Sold at ‘Prevailing International Price of Gold’
Just a few weeks after revealing its plans to roll out gold coins, the Reserve Bank of Zimbabwe (RBZ) released a statement on July 4 advising “the public of the salient features and characteristics of the gold coin.” According to the statement, the public will be able to purchase the gold coins “at a price based on the prevailing international price of gold and the cost of production.”
The sale of the coins is expected to commence on July 25 and buyers will be able to purchase the coins using local currency or USD, the RBZ said. The gold coins, which have been named Mosi-Oa-Tunya (the local language equivalent for the Victoria Falls), weigh one troy ounce or approximately 31.10 grams. Each coin has a purity of 22 carats and is assigned a serial number for identification purposes, the statement said.
The RBZ has previously said the gold coins will be used as an alternative store of value by Zimbabwean investors that are seeking to shield their savings against the country’s runaway inflation. Before the central bank’s latest decision, individuals and unlicensed entities were barred from buying or storing gold.
According to the country’s laws, only authorized individuals or entities are permitted to possess or sell the precious metal to the country’s sole buyer of gold, Fidelity Printers and Refiners. Individuals violating the relevant law risk being sent to jail.
Coin Holders to Be Issued Ownership Certificate
However, in the statement that also informs residents of the places where they can purchase the gold coins, the RBZ assures investors buying the gold coins that they will be allowed to “take physical possession of the coin.” The statement added that gold coin holders will be issued a “Bearer Ownership Certificate.” Holders that opt to use the custody services of a third party will be issued a relevant certificate or receipt.
For financial institutions or entities that wish to trade or use the coins, the RBZ said:
The coin will have liquid asset status, that is, it will be capable of being easily converted to cash, and will be tradable locally and internationally. The coin may also be used for transactional purposes.
In addition to having a prescribed asset status, the gold coins will be “used as security for loans and credit facilities.” There is also a buy-back arrangement should the holder decide to liquidate the coin, the RBZ said.
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Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.
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