Zimbabwe, known for its high hyperinflation rates, is trying to address its currency crisis once again. The central bank recently announced the launch of ZiG, a new currency that is backed by gold. This is the sixth time the bank is trying to stabilize its currency, as the Zimbabwe dollar's value has dropped by more than 75% this year.

The government hopes that the introduction of the new currency will help stabilize the economy, which is facing high levels of inflation. Companies will now be required to pay their taxes using ZiG. Initially, the new currency is supported by $100 million in cash and 2,522 kilograms of gold worth $185 million, which is three times more than the amount of ZiG being circulated.

Despite these efforts, there are doubts about the long-term success of the new currency. Zimbabwe heavily relies on the US dollar for transactions, even though the Zim dollar is officially used. People and businesses have faced losses due to the frequent changes in the Zimbabwean currency. This has made them wary of taking risks with the new ZiG currency.

Moreover, Zimbabwe is the only country to have a gold-backed currency. Other countries moved away from such systems many years ago. The country may not have enough gold reserves to sustain the currency in the long run. Analysts believe that Zimbabwe may not have the necessary gold reserves to support ZiG, leaving the currency vulnerable.

Given these challenges, analysts suggest that Zimbabwe should consider adopting the US dollar as its official currency since it is widely used in most transactions. This may be the most practical solution for stabilizing the economy and ensuring financial security in the long term.