Zimbabwe introduced a new currency

The new Zig currency (ZiG) was already introduced electronically at the beginning of April, and now this currency can also be used in the form of banknotes and coins.

It is Zimbabwe’s latest attempt to emerge from a protracted currency crisis that underscores the country’s economic woes. The government has previously considered several ideas to replace the Zimbabwean dollar, including introducing gold coins and even trialling a digital currency.

The new currency, whose name is an abbreviation for Zimbabwe Gold (ZiG), is backed by the country’s gold reserves. However, since its electronic implementation on April 5, it has not gained confidence and even some government agencies have refused to accept it.

The Zig is the sixth currency used in Zimbabwe since the collapse of the Zimbabwean dollar in 2009 amid $5 billion hyperinflation. A chaotic series of events followed: first the US dollar was allowed as legal tender, then it was banned, and then allowed again.

Later, both gold coins and digital currency were tried, but the US dollar still remains the most reliable means of payment for ordinary citizens.

The Zimbabwean government has allowed some businesses, including gas stations, to stop accepting the new currency and accept US dollars instead. Some offices, including passport issuing and renewal offices, only accept US dollars.

Other companies were ordered to use only the new currency or face fines.

Many in Zimbabwe still remember how the 100 trillion Zimbabwe dollar notes were printed in 2009 during hyperinflation.

At one point, a piece of bread was worth more than 500 million Zimbabwean dollars. Restaurants stopped listing prices on menus because they tended to go up during meals. People walked around with bags full of banknotes. Savings and pensions have become worthless.

The government of Zimbabwean President Emmerson Mnangagwa has resorted to harsh methods of introducing a new currency. Dozens of currency black market participants were arrested on charges of undermining the new currency. Following the electronic introduction of the zig, some companies’ bank accounts were frozen as the government accused them of refusing to accept the new currency.

The government said it trusted the zig because it was backed by the country’s gold reserves. In a speech Monday, the president said the zig’s credibility was a matter of “our national identity and dignity.”

An online publication published a political cartoon showing a policeman trying to prop up a collapsing house with the inscription “ZiG”. The cartoon was titled “The World’s First Police-Backed Currency.”