This morning, after months of delays, the Reserve Bank of Zimbabwe is finally embarking on its new ‘Bond Notes’ monetary experiment: the issuance of legal tender that is not currency (just a ‘pseudo-currency’ to prevent the externalisation of real currency).

So you know, this is not the only monetary phenomenon that is unfolding itself in the world right now:

  1. India is in the middle of un-fiating 86% of its money in circulation;
  2. There’s a new, almost-one-month-old cryptocurrency called Zcash, which has solved the problem of crypto-anonymity through the use of zero-knowledge proofs (#hocuspocus);
  3. Australia’s Citibank has announced that it will no longer accept the deposits of cash in its banks. Because why would a bank want to accept your money?
  4. Venezuela’s hyperinflation has meant that their largest bank note is now worth about $0.05 – which has led to a surge in electronic banking, and some generic cash-in-a-wheelbarrow photographs.
  5. Chinese speculators appear to have caused a pricing bubble in garlic-bulb futures.

Back to the bond notes

Here they are:

Zimbabwe's bond notes and coins guide

Here’s an extract from the RBZ announcement:

The bond notes will be released into the market through normal banking channels in small denominations of $2 and $5 to fund export incentives of up to 5% which will be paid to exporters of goods and services and diaspora remittances. The initial release of bond notes shall be in an amount of $10 million in denominations of $2 and $2 million in $1 bond coins.

In line with the Bank’s thrust to promote a less cash society through the use of plastic money, withdrawal limits of bond notes have been set at a maximum of $50 per day and a maximum of $150 per week. This measure is in tandem with the objective of the Bank to release bond notes into the market on a measured basis which is critical to mitigate against abuse of bond notes.

Here’s a section that I have some questions about:

The Reserve Bank has engaged and agreed with the Retailers Association of Zimbabwe, fuel companies, representatives of the various business associations and the Consumer Council of Zimbabwe on the use and acceptability of bond notes as a medium of exchange in the country.

Here are those questions:

  1. Has the Reserve Bank engaged and agreed with the Police Force “on the use and acceptability of bond notes as a medium of exchange in the country”? And specifically, all those police officers that man all those roadblocks with spiked rods?
  2. Has the Reserve Bank engaged and agreed with the municipalities, public utilities and regulatory authorities “on the use and acceptability of bond notes as a medium of exchange in the country”?

Because the one big silver lining here should be the ability to pay both unreasonable spot fines and inexplicable rates bills in non-currency bank notes.

We shall have to see.


Rolling Alpha posts about finance, economics, and sometimes stuff that is only quite loosely related. Follow me on Twitter @RollingAlpha, or like my page on Facebook at Or both.