Tanzania’s Central Bank says It’s Working on President’s Directive to Prepare for Bitcoin Adoption
The central bank of Tanzania said it is working on President Samia Suluhu’s directive to prepare for cryptocurrencies, which could reverse the ban put on digital assets in 2019.
The new president came to power in March after the death of her predecessor John Magufuli and is much more open to foreign investment than him. Earlier this month, she said the arrival of crypto assets in the East Africa nation was inevitable.
“In the financial sector, we have witnessed the emergence of blockchain technology or cryptocurrency,” Hassan said during the opening of a new central bank branch in Mwanza this month.
“Many countries in the world have not accepted or started using these currencies. However, I would like to advise the central bank to start working on those issues. Just be prepared.”
Back in November 2019, Tanzania’s central bank banned crypto, saying they were not recognized by local law as legal currencies, and warned its citizens to stay away as they might lose money if they invested in such speculative assets.
But now, the Bank of Tanzania is adapting following the president's comments.
“The bank is working on the directives given,” a central bank spokesperson told Reuters this week but declined to give further detail.
The spokesperson didn’t share if they plan to adopt existing cryptocurrencies or look to issue their own central bank digital currency (CBDC).
Tanzania Bankers' Association chairman Abdulmajid Nsekela welcomed the President's push for the $63 billion economy that relies heavily on cash transactions.
“The most challenging element for regulators is to be caught by surprise by innovations,” he said, adding: gradual preparations would help them assess the risks and come up with ways of addressing them in advance.
However, analysts warned that progress might be slow because while the change in tone from the president is clear if it's to be seen “whether the central bank will take concrete steps towards embracing cryptocurrencies,” said Faith Mwangi, an analyst at Tellimer.
Similar moves to adopt Bitcoin as legal tender is being made by Paraguay and Panama as well.