Starting July 25, Zimbabweans will be able to buy and hold one troy ounce of gold. According to the central bank, the coins can be used as alternative value storage, as well as for transactions and as “collateral for loans and extensions of credit.”
The coins will be sold at the “current international price of gold.”
The Reserve Bank of Zimbabwe (RBZ) issued a statement “advising the public of the salient features and characteristics of the gold coins” on July 4, just weeks after revealing plans to roll out the coins. According to the statement, the public may purchase gold coins. The public will be able to purchase gold coins “at a price based on the international price of gold and the cost of production.”
The sale of the gold coins is scheduled to begin on July 25, and buyers can purchase them in local currency or in US dollars, the RBZ said. The gold coins will be named “Mosi oa Tunya” (meaning Victoria Falls in the local language) and will weigh one troy ounce (about 31.10 grams). Each gold coin has a purity of 22 carats and is assigned a serial number for identification, the statement said.
The gold coins will be used by Zimbabwean investors as an alternative store of value to protect their savings from the country’s runaway inflation, the RBZ had previously said. Prior to the central bank’s latest decision, individuals and unauthorized organizations were prohibited from buying or storing gold.
According to the country’s lawAccording to the country’s law, only authorized individuals or organizations are allowed to hold or sell precious metals to Fidelity Printers and Refiners, the sole buyer of gold in the country. Individuals who violate the relevant laws risk being sent to prison.
Issuance of Certificate of Ownership to Coin Holders
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However, in a statement informing residents where they can buy gold coins, the RBZ assures investors who buy gold coins that they will be allowed to “take physical possession of the gold.” The statement adds that gold coin holders will be issued “an unregistered certificate of ownership.” Holders who choose to use a third-party custodial service will be issued the relevant certificate or receipt.
As for financial institutions and organizations wishing to trade or use the coins, the RBZ states.
The coins will be liquid assets, i.e., easily convertible into cash, and will be able to be traded both domestically and internationally. The coin can also be used for trading purposes.
In addition to its status as a predetermined asset, the gold coin would be “used as collateral for a loan or line of credit.” There is also a buy-back arrangement if the holder decides to liquidate the coins, the RBZ said.
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