The new currency, an outgrowth of the government’s gold-backed token, is performing well economically but receiving mixed public reviews.

The introduction of Zimbabwe Gold (ZiG), a gold-backed currency, has seen mixed results since its launch. While ZiG has performed relatively well on the foreign exchange market, appreciating by 1.9% against the U.S. dollar, it has faced significant challenges domestically.

Key Developments:

1. Combating Illegal Trading:
- Public Appeal and Law Enforcement Actions:
- The Zimbabwe Reserve Bank (ZRB) has taken active measures to combat the black market for ZiG. On June 4, the ZRB appealed to the public via its X account, encouraging them to report illegal currency traders and businesses refusing to accept ZiG.
- South African-based Crime Watch Zimbabwe reported that 224 illegal FX traders were arrested, 90 bank accounts were frozen, and 40 people were fined as part of these efforts.

2. Operational Challenges:
- Lack of Small Denominations:
- A shortage of smaller ZiG denominations (ZiG1, ZiG2, ZiG5, ZiG10) has been highlighted as a significant issue. The ZRB aims to increase the availability of small change across the economy.
- Cash Withdrawals:
- Starting June 10, ZiG cash will be available for withdrawal from the government-owned Homelink financial services company using debit cards in seven cities. Other financial institutions are expected to follow suit in offering this service.

3. Public Reception and Usage:
- Mixed Reviews:
- The ZiG, introduced as Zimbabwe’s sixth currency in 15 years, was initially met with skepticism. The gold-backed digital token (GBDT), now serving as an investment instrument, faced criticism due to its resemblance to central bank digital currencies (CBDCs).
- Continuing Foreign Currency Use:
- Despite the introduction of ZiG, several foreign currencies remain legally usable in Zimbabwe, adding to the complexity of the country’s monetary landscape.

Conclusion:

While the ZiG has demonstrated potential in the foreign exchange market, significant hurdles remain for its domestic adoption and practical use. The ZRB's ongoing efforts to tackle illegal trading and ensure the availability of small denominations are critical steps toward stabilizing and gaining public trust in the new currency. The mixed reception and operational challenges highlight the complexities of implementing a new currency in an economy already familiar with multiple currency transitions.