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A surprising part of the debate on the planned introduction of bond notes announced this week by the Reserve Bank of Zimbabwe is built upon a total lack of understanding of just what bond notes are and what, in fact, is being planned.

For a start bond notes are not a currency.

No one will be able to open a bank account in “bonds”; no shop will display prices in “bonds”.

Bank accounts will remain in real currencies, the overwhelming majority in Zimbabwe use US dollars.

Prices will still be quoted in US dollars, and if quoted in any other currency that quote will be at the exchange rate with the US dollar for that day.

Conceptually a bond note is very similar to the standard basic Zimswitch swipe card every account holder has been using for years, or the RTGS forms that businesses use for many of their transactions and which ordinary people use for things like paying school fees or making large payments.

These are simply ways of transferring US dollars from one Zimbabwean-based US dollar bank account to another and bond notes will join them.

Like the basic swipe cards and the RTGS forms, and incidentally like the mobile and telephone based payment systems, bond notes can only be used inside Zimbabwe.

They cannot be used to move money from Zimbabwe to external accounts nor move money from external accounts to Zimbabwe.

And like these other messenger systems, they do not have real value until they are deposited back by some end-receiver into a bank account, where they turn back into US dollars.

But this should not affect ordinary Zimbabweans in legitimate transactions.

Many use international credit cards, including prepaid ones, to travel, to make modest payments over the Internet and the like. There are daily limits which make capital payments almost impossible, but for most it is having enough US dollars in their Zimbabwe bank account in the first place that is the bottleneck, not the limit on daily spending outside Zimbabwe.

In the perfect plastic economy that so many at the top of the world’s central banks, finance ministries and tax authorities desire, there would be no banknotes at all.

We would all just use a card, and every transaction would be recorded, from the 20c for a couple of tomatoes on the roadside to the billion bucks used to buy a mine.

But we are far from that perfect society and we all need simple and cheap ways of moving value, to pay bus fare, to having a haircut, to buying a drink or spending some money in a small shop.

While supermarkets and the larger shops all have swipe machines, they are rarely found in small business or in service stations, and are non-existent in the large informal sector. So we need banknotes or other tokens, and bond notes if issued and used properly will fill that bill.

However, the Reserve Bank needs to keep in mind the dark memories Zimbabweans have or the last time it used printing presses.

Using US banknotes was self-policing. A bank had to have US dollars in a foreign account to obtain the notes and ship them to Zimbabwe and there was no other way of adding to the pool of notes except through imports.

Bond notes should be same.

The RBZ will require banks to transfer US dollars to the central bank to obtain bond notes, so there should be perfect backing. But we would urge the Reserve Bank to issue weekly reports of how many bond notes are in circulation and how these are all backed with real dollars.

That trust will be vital if the scheme is to work.

We can, in Zimbabwe, maintain the advantages of using hard currency while allowing the Reserve Bank more power to use monetary policy to ameliorate economic problems and reinforce economic success.

But we can only do this in an atmosphere of total trust and maximum transparency.