The legal nature of bond notes in Zimbabwe

Abstract

The legal field of money and currency is one of the most complex fields of law. Issues of creation of money and its regulation have largely been left to sovereign nations with little interference at international level. As a result, almost all nations across the world have each their own currencies which they regulate to be acceptable in those nations as legal tender, unit of account and store of value or wealth. The economic meltdown encountered in Zimbabwe led to the government of this country introducing various monetary measures in an attempt to deal with the currency crisis experienced as a result thereof. Bearer cheques were introduced first but that did not solve the crisis. In 2009, the Government introduced multi currencies which were dominated by the United States dollar (US$) and later legally demonetised its own currency, namely the Zimbabwe dollar in 2015. It seemed as if the currency crisis had been resolved until early 2016, when the country began experiencing severe cash shortages, despite its cash economy. In an endeavour to mitigate the cash crisis, the Government, through its central bank, announced the introduction of bond notes. The bond notes are said to be not a return of the local currency but are surrogate to the US dollar. This posed the question which was interrogated in this study: To what extent are bond notes effectively regulated in Zimbabwe and regarded as legally acceptable payment in Zimbabwe and other countries?