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Gibson Nyikadzino Correspondent
The future of world economies, development, education and industrialisation is truly anchored on the use and adoption of digital innovation and the dependability on internet connectivity.
The world has become digital and so has the economy.
Digital economies are a result of the transformation of traditional economic activities, products, and services into digital form.
It is based on the internet and supported by electronic means.
Often times, the country’s chief executive has encouraged the use of the competent mind along technical directions that yield solutions to community, national and international arena, as Zimbabwe is now living in the midst of a digitally-driven economy.
The digital economy, also known as the internet economy, new economy, or the web economy, is based in a large part on digital convergence to address problems using new and modern methods.
By so doing, the digital economy helps create economic values that present new foundations to emerging businesses.
Innovations and ideas around economic transformation in the era where most transactions are digital driven remain crucial in all sectors, including the financial services sphere.
The internet’s presence is one that facilitates the interconnectivity within the envisioned digital economy which entrepreneurs should not turn a blind eye on.
Zimbabwe’s launch of the Mosi-oa-Tunya coin, or gold coins, are a noble idea that also needs to be expanded to speak to the unfolding demands of the national and global trade architecture.
Caution also needs to be taken when adopting new measures.
In this instance, the adoption of the gold coins last week by Zimbabwe generate another key and interesting dimension in how innovations around the economy can be harnessed to spur economic development and open more avenues for the tech-savvy generation.
An exhaustive engagement is sought among economic intellectuals in both private, public and academic institutions to come up with a position paper on the possibility and likelihood of Zimbabwe introducing a digital currency.
The advent of modern technologies brings opportunities and also present risks that need to be addressed.
The use of the Central Bank Digital Currencies (CBDC) is becoming a new and adoptable phenomenon in some African, Asian, European and Latin American countries and gaining traction for world economies.
CBDC’s are a digital version of money that can be used alongside physical notes and coins, in the case of Zimbabwe, they can be used alongside the country’s currency.
Digital currencies are not bitcoins.
They are issued directly by the central bank and it is important for African governments to work and understand what having a digital economy means in practice.
The bitcoin currency lacks a central issuer and to some, there is no financial or economic basis for its creation.
The breath confidence in this initiative, the biggest development is to ensure that the users’ money is safe and that the currency works alongside other ways of payment and will be available to anyone.
There are different and confronting opinions regarding the future of money and the sovereignty and independence of nations in their continuance to use the US fiat currency.
Last October, Nigeria introduced its digital currency, the eNaira.
Lawmakers in the Central African Republic (CAR) this year unanimously voted to have bitcoin as legal tender, a move the US and the International Monetary Fund (IMF) condemned and cautioned following El Salvador’s decision to do so.
Central banks across the world are considering sovereign digital currencies. These currencies are expected to be transformative in all aspects of the monetary system and facilitate the systematic and transparent conduct of monetary policy.
In this case, economists greatly share that the central bank digital currency can serve as a practically costless medium of exchange, a secure store of value, and a stable unit of account.
On the contrary, the biggest fear the US government has over the adoption of the bitcoin as legal tender and counselling states against use of the digital currencies is that in the future the digital currencies and bitcoins will reduce and minimise the potential of the US to print more money and fund its wars.
Because the introduction of the Mosi-oa-Tunya gold coins is meant to stabilise the local currency, control the parallel market rate and as a store of value, the same goes for the digital currency.
Like elsewhere, digital currencies may carry risks that pertain to cyber security, monetary policy implementation, financial integrity, stability and operational resilience.
But advantages also include the increase in financial inclusion, facilitation of remittances and reduced informality.
The Reserve Bank of Zimbabwe (RBZ) recently confirmed that diaspora remittances so far grew by 23 percent to US$797 million from US$651 million in 2021 during the same period.
With the digital currency, there is convenience and inclusion to the generality of the population using this currency also as a store of value, who in other terms may not have a store of value in the Mosi-oa-Tunya gold coins, but the digital currency.
This also offers businesses new ways to prepare for the future envisioned through the Fourth Industrial Revolution (4IR).
The adoption of the CBDC can also serve as part of digital innovation that should be seen as generating benefits to all citizens.
National digital currencies could also help reduce reliance on commercial banks as the principal interface for money management as people can interact digitally in making their transactions.
While research around the use of the CBDC in Zimbabwe, whether it can be adopted on not, is underway, the reasons for its disputations ought to be measured against the country’s aspirations to be leading in the digital economy.
These are some of the developments Zimbabwe may consider investing in 10 years from now, when the nation reflects, there should be no regrets.
The world is moving towards the digital direction and that is a wave we may also consider looking at.
Online Reporter