Monday, January 30, 2023
  • President Hassan’s comments and actions on improving Tanzania’s cryptocurrency reflect how open she is to foreign investment
  • The Bank of Tanzania has sent out their officials to countries with more experience in CBDCs. This is an attempt to try and get a more comprehensive view of how these countries accomplished this fantastic fit
  • Aside from CBDCs, Tanzania cryptocurrency has also received support from key contributors such as Yellow card, Paxful and Purse exchange

Africa has made waves in the crypto space for some time now. Headlines consistently scream one or two things involving Key African countries like; Kenya, Nigeria, South Africa, Ghana and even Egypt. You’ll often hear that one has made some massive step in cryptocurrency or pioneered new blockchain equipment.

Focusing too much on these five key countries, we lose sight of the underdogs and their contribution to Africa’s crypto ecosystem. Tanzania’s cryptocurrency efforts are worth a mention; it has recently risen through the ranks in the crypto world and now stands among the top 100 countries in cryptocurrency.

The continuous use of crypto assets within Tanzania paints a clear picture of the growth rate of Africa’s crypto ecosystem. Investing in cryptocurrency might take a turn for the better, primarily since the Bank of Tanzania(BoT) has expressed interest in CBDC.

The initial downhill of Tanzania’s cryptocurrency

Like in every other African country, Tanzania met cryptocurrency with much hostility from the Tanzanian government. In 2017, when dealing with cryptocurrency was still new in Africa, its government instantly rejected the currency.

Also, Read MasterCard launches CryptoSecure, a new addition to blockchain security

The Director of the National Payment Systems of the Bank of Tanzania warned its citizens against using crypto assets. They would offer no assistance to those who did, and things went sideways. This was a typical move during those times. Although the few crypto enthusiasts in Tanzania still believed and continued investing in cryptocurrency.

Crypto assets

Tanzania CBDC is finally coming sonner than expected with the Bank of Tanzania disbursing researchers all over Africa.[Photo/CoinGeek]

Its slow but steady growth rate alarmed the BoT, which later issued a ban on the use of cryptocurrency in 2019. They stated that the country’s only acceptable and used legal tender was its fiat currency. At the time, the Bank of Tanzania was trying to warn its citizens of the high risk involved in dealing with cryptocurrency. 

Despite its aggressive approach to crypto assets, Tanzanian crypto traders still took the risk and steadily expanded their network. Evidently, at the time of the ban, Tanzania could climb the ranks and be placed at 72 out of the 249 countries actively investing in cryptocurrency.

According to the then governor Florens Luoga, the Bank of Tanzania was still conducting extensive research on crypto assets before accommodating it. In addition, they refrained from altogether banning the notion and stated, “We can’t outlaw something that we are not yet competent with or regulate a game that we don’t know how to play.

We have not reached a position where we can cauterize cryptos, but we welcome applications from interested parties. All should feel free to present their ideas for consideration.”

After years of consideration, the BoT recognized the notion of Tanzanian CBDCs.

A change of heart toward Tanzania cryptocurrency

To truly understand something, you must take the time to learn it and the Bank of Tanzania did just that. Over the years since the ban on cryptocurrency, the notion of Tanzanian CBDCs was just rumours and murmurs.

Most crypto asset holders in Tanzania actively advocated the shift to Tanzania’s crypto coin. In Dar es Salaam, 2021, the BoT announced its interest in working with their new president, Samia Suluju Hassan, to conduct a proper transition to crypto assets.

Changes were bound to happen with the new administration. According to Samia, the financial sector of Africa was rapidly changing. While opening a new central bank branch, she stated that blockchain technology and cryptocurrency were transitions Tanzania could not afford to miss. 

At the time of this public decision, Nigeria had launched its own CBDC, the eNaira. In doing so, it joined the ranks of the few African countries to join CBDC. This became a motivation to open the minds to a possible Tanzanian CBDC.

Since a sister country, El Salvador was the first to adopt bitcoin as a legal tender, many governments were contemplating incorporating CBDCs within their economy. 

Tanzania’s new move shows promise.

To further perfect and develop Tanzania’s cryptocurrency, the Bank of Tanzania has sent out an official to countries with more experience in CBDCs. This is an attempt to try and get a more comprehensive view of how these countries accomplished this fantastic fit. According to Governor Florens Luogo, Tanzania cannot continue to ignore central bank digital currencies. It aims to keep up with neighbouring countries such as Kenya in the crypto race. 

“Almost worldwide, central bank governors are training right now to discuss how to incorporate CBDC within their economy,” says Luogo.

Also, Read Crypto making millionaires in Nigeria despite government hostility

President Hassan’s comments and actions on improving Tanzania’s cryptocurrency reflect how open she is to foreign investment. A shift from the previous administration of John Magufulu, who was severely against the idea, so much so that it locked heads with Kenya.

Aside from CBDCs, Tanzania cryptocurrency has also received support from key contributors such as Yellow card, Paxful and Purse exchange. These exchange platforms have greatly expanded crypto accessibility among Tanzanians giving it its much-needed growth rate. Investing in cryptocurrency in Tanzania is still a developing concept so far.

The Bank of Tanzania is still working on a method to integrate CBDCs within their economy successfully. They have not officially announced it but have taken the necessary steps in designing and researching.                                                                                                         

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