PRESIDENT Emmerson Mnangagwa, using the Presidential (Temporary Measures) Powers Act, introduced a virtual currency, the real-time gross settlement systems (RTGS) dollar, which will remain legal tender for six months if it’s not made substantive through an Act of Parliament.
The Presidential Powers (Temporary Measures) allow the President to introduce legally binding laws in an emergency without going through parliamentary processes, with the law only holding for six months.
Statutory Instrument (SI) 33 of 2019 also gave powers to the Reserve Bank of Zimbabwe (RBZ) to issue an electronic currency for local use, which will trade as the RTGS dollar.
“In addition to its powers to issue bank notes and coins in terms of this Act and subject to subsection 3, the bank shall have the sole power to issue or cause to be issued electronic currency in Zimbabwe,” the Statutory instrument read.
Former Finance minister Tendai Biti said according to the law gazetted last Friday, Zimbabwe did not have a currency, but virtual money that only existed as factious figures.
“It is not real money. It’s an electronic currency if you read the law; it is factious money, just figures in the bank which is still at par with the USD,” Biti said.
The SI reads: “That the Reserve Bank has, with effect from the effective date, issued an electronic currency called the RTGS dollar. That the real time gross settlement system balances expressed in USD, immediately before effective date shall, from effective date, be deemed to be opening balances in RTGS dollars at par with the US dollar and that such currency shall be legal tender within Zimbabwe from effective date.”
Economist John Robertson said if the currency could be maintained stable for a month or two, it could be declared a new currency and could build for the eventual return of the Zimdollar.
“It is going to be a new currency if we can make it stable and make it acceptable to the nation. There is a little bit of a gap now developing and we have to see how quickly the currency can become stable. At the moment, it’s trading at the banks at 2,5:1, but out on the streets, there are still people saying we can still make a profit because it’s hard to get for the buyers, so a market exists,” he said.