Tanzania Eyes Own Central Bank Digital Currency (CBDC) amid Plans to issue Crypto Regulations

Tanzania’s central bank has announced intentions to launch its central bank digital currency (CBDC) amid the global rise and the increasing adoption of cryptocurrencies.

The country’s Central Bank Governor Prof Florens Luoga made this comments while speaking last week at a two-day Conference of Financial Institutions in Tanzania held on 25th and 26th November, 2021 which focused on economic recovery post Covid-19. The conference was also attended by the country’s pro-crypto President Samia Suluh.

“To ensure that our country is not left behind the adoption of central bank digital currencies, the Bank of Tanzania has already begun preparations to have its own CBDC,” Central bank Governor Florens Luoga said on 25th Thursday 2021.

The Governor also mentioned that the Central Bank is currently strengthening the knowledge and capacity of its officers on digital currencies as part of the preparations in anticipation for launch.

Tanzania On regulation of Crypto;

Additionally, the governor revealed that they are still researching on cryptocurrencies and they will issue regulations once research is complete.The Central in November 2019 warned the public to be cautious when trading in cryptocurrencies saying they are not authorised in the country.

“As far as we know, cryptocurrencies are not safe. We cannot give timelines when to issue regulations, we are still researching – we will give regulations when we have finished our research” – Prof. Florens Luoga, Governor, Bank of Tanzania.

The remarks by the country’s central bank come few weeks after the country’s President Samia Suluh on 14th June 2021 told financial chiefs to prepare for cryptocurrency, saying  the age of crypto and blockchain was dawning as she urged her country to pave the way for change.

“I know that throughout the nation, including Tanzania, they have not accepted or started using these routes. However, my call to the Central Bank is that you should start working on that development. The Central Bank should be ready for the changes and not be caught unprepared.” She was quoted by the local media in June.

CBDC;

A central bank digital currency (CBDC) is a digital form of central bank-backed money and represent money that’s a direct liability of the central bank. Several central banks across the world are experimenting with CBDCs with most of them at very early stages.

On 25th October this year, Nigeria became one of the first countries in the world and the first in Africa to launch its own Central Bank Digital Currency (CBDC) dubbed the eNaira. According to media reports, the eNaira saw over 400,000 new wallets registered with 12,500 transactions worth $113,000 in less than two weeks of launch.

Other countries planning a CBDC?

Several other countries have already taken concrete steps or announced their intentions to launch a CBDC in the future. The Bahamas became the first country in the world to publicly avail its own central bank digital currency (CBDC) in October 2020.

Latest reports indicate that a total of 15 countries are in the pilot stages with their own CBDCs, including China,South Korea and Sweden, with about 81 countries in other stages of exploring CBDCs.