Tanzania Shows Optimism About Adopting Cryptocurrency
Last updated on November 1st, 2022 at 11:24 am
The Tanzanian Central Bank has stated that it works closely with the country’s president, Samia Suluhu Hassan, towards adopting cryptocurrencies.
According to reports, the president had issued a directive urging relevant stakeholders to prepare to accept cryptocurrencies.
The recent show of optimism is contrary to the stand that the country had taken in 2019. At the time, Tanzania had banned the use of cryptocurrencies and all related transactions. The recent change in thought could be attributed to the recent boom in the crypto market.
Earlier in March, Suluhu had stated that the arrival of cryptocurrencies in the East African region was inevitable.
Speaking at the time, Suluhu stated that,
“In the financial sector, we have witnessed the emergence of blockchain technology or cryptocurrency.”
She gave these remarks during a function to launch a new central bank location in Mwanza.
She also spoke on the reluctance of central banks towards accepting cryptocurrencies saying,
“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, the Tanzania Central Bank had banned cryptocurrencies saying the local law did not recognize them.
Tanzania Optimistic Toward Crypto
Following the president’s remarks, the financial institution may be preparing for crypto adaption in the economy. A spokesperson from the Bank of Tanzania stated that “The bank is working on the directives given” and failed to give further information.
Suluhu’s remarks come a few weeks after El Salvador, a country in Central America, stated that it would be adopting Bitcoin as legal tender. The news prompted news of how cryptocurrencies would shape the future of economies.
The spokesperson of the bank did not give in-depth details into the matter.
Moreover, he did not clarify whether the country would be adopting cryptocurrencies or working towards creating a Central Bank Digital Currency (CBDC). Most central banks have chosen this option, including China, Thailand and more.
Suluhu has become a more open person towards adopting innovative economic measures that will boost Tanzania’s economy.
The former president of Tanzania, John Magufuli, had a firm stance on similar issues. He restricted foreign gold miners and even caused trade friction between Tanzania and Kenya.
Abdulmajid Nsekela, the Chairman of Tanzania Bankers Association, has gladly welcomed Suluhu’s directive. If the central bank’s plans come to be, it will help the country transition from relying on cash and move towards more innovative financial systems.
To fully adopt strong mechanisms that will boost cryptocurrency adoption, it needs to prepare for the adoption gradually. Taking ample time will help the central bank to assess risks and take measures to mitigate these risks. Because of this, analysts have stated that the process will be slow.
Faith Mwangi, an analyst at Tellimer, stated that
“The change in tone from Tanzania’s president is clear, but wait to see whether the central bank will take concrete steps towards embracing cryptocurrencies.”
Uganda, a neighboring country to Tanzania, had in 2017 banned cryptocurrencies and the directive is still in place.
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