New Gold-Backed Currency Gains Steam & Challenges the US Dollar

Inspired by the BRICS de-dollarization agenda, Zimbabwe launched a new gold-backed currency, the ZIG, early this year to take on the US dollar. The gold-backed currency was launched in April 2024 to reduce the circulation of the US dollar in the country. Surprisingly, ZIG is gaining steam across Zimbabwe and 40% of payments are being initiated in the new currency by citizens.

Also Read: More Than 50 Countries Could Accept BRICS Payment System

While 40% of payments are being settled by citizens, the government settles 80% of transactions in the gold-backed ZIG. This comes from the playbook of BRICS where the alliance aims to make the US dollar a secondary currency. The bloc convinces developing nations to use local currencies to strengthen their economies.

Also Read: 47 Countries Ready To Join the BRICS Alliance

BRICS: Gold-Backed ZIG Currency Grows in Zimbabwe, Only 60% Transactions Settled in US Dollar

ZIG has eaten up 40% of all transactions leaving the US dollar at 60% of trade settlements in Zimbabwe. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade. The government wants the gold-backed ZIG to be the sole currency by 2026 and end dependency on the US dollar.

Also Read: New Country Shows Interest To Join BRICS Before 2024 Summit

The move will help Zimbabwe stabilize its economy and rely on its currency and not foreign tenders. The increasing usage of the ZIG indicates that it could be the main currency in 2026 ending reliance on the US dollar. The currency wars could intensify in the coming years as BRICS is becoming successful in convincing developing nations to ditch the US dollar.

Former President Donald Trump has vowed that other countries will not ditch the US dollar when he’s elected to office. “I would not allow countries to go off the US dollar because when we lose that standard, that will be like losing a revolutionary war. That will be a hit to our country. It doesn’t get clearer than that,” he said referring to BRICS.