KEY POINTS
- A prominent lawyer claims that the Zimbabwe Gold (ZiG) currency is no longer legal tender due to the expiration of its statutory instrument.
- The lawyer argues that the government cannot legally extend ZiG’s validity without reissuing it.
- The claim raises questions about Zimbabwe’s legal currency framework and monetary policies.
A leading Zimbabwean legal mind has opined that the Zimbabwe Gold (ZiG) digital currency has been denationalized by the passage of time and the invalidation of the statutory instrument that underpinned it.
The claim implies that the currency which was put into circulation by the government to solve problems of cash scarcity and to support the economy, is no longer legal tender without a fresh legal authority.
Surrender of the statutory instrument
The lawyer argues that the statutory instrument which legalised the use of ZiG currency has run out of time and cannot be renewed without going through the processes of legislation.
In the view of the lawyer, Zimbabwe laws demand that statutory instruments be renewed through certain procedures and that if this is not done, then any currency linked to it becomes as such, is invalid. This assertion is a blow to the current use of the ZiG as a legal tender in Zimbabwe.
In a New Zimbabwe publication, the expiry of the statutory instrument impacts on the legal status of the ZiG as well as reveals loopholes in the government’s currency control and regulation frameworks.
These claims, however, have not been addressed by the government and therefore many Zimbabweans are in the dark on the fate of the ZiG and its possible future as a legal tender.
Theoretical implication for currency stability
The question arising from the above issue is the validity of the above currency ZiG sparking more problems for Zimbabwe related to the stability of the currency that has been volatile most recently due to inflation rates and cash shortages.
The ZiG was launched as a digital currency that would be anchored on gold to provide stability and act as a substitute to the local volatile currency. However, legal uncertainty of the ZiG may reduce people’s trust, which is a problem for the use of the ZiG as a medium of exchange.
If the lawyer’s narratives are proved true, Zimbabwe may experience other challenges in attempts to manage economic instability via other currencies.
Scholars have opined that the legally undefined nature of the ZiG poses risk to economic actors who utilise the monetary form: particularly when they engage in activities that require large value mediums of exchange or stores of value.
Demands for the government to come out clear
As the debate on the ZiG’s status continues, more people are demanding that the Zimbabwean government come out clear on the issue.
Both legal scholars and economists agree that if the statutory instrument has indeed run out then the government should move fast to fix the legal problems and stabilize the currency. Possible courses of action entail redeployment of the instrument where an original intent aims at pulling out the ZiG as legal tender with an extension of its validity.
It has now become questionable as to what the monetary framework of the country is and this has brought out the issue of clear understanding of the regulatory framework on the issuance of currency.
These assertions on information dissemination by the government might be decisive in determining the future of digital as well as alternative currencies in Zimbabwe.
