Governor of Tanzania’s central bank plans to create a CBDC

Tanzania is planning to launch a central bank digital currency (CBDC). The Tanzanian central bank has stated that the CBDC would not be used as legal tender, but it would only complement the Tanzanian shilling.

Tanzania will be following the steps of Nigeria, which became the first African country to launch a CBDC.

Tanzania to create a CBDC

A recent report by Bloomberg cited the governor of the central bank of Tanzania, Florens Luoga, who stated that the country had unveiled plans to develop a CBDC. Luoga stated that launching a CBDC would ensure that Tanzania is not left behind in adopting a CBDC.

“The Bank of Tanzania has already begun preparations to have its own CBDC,” Luoga stated.

Luoga also stated that while the country was adopting a CBDC, it remained wary of cryptocurrencies. Luoga urged the public to remain cautious of cryptocurrency investments because they were highly risky and volatile.

The launch of a CBDC in Tanzania was not unexpected, given that the country’s president, Samia Suluhu Hassam, had earlier stated that the country needed to be prepared for the adoption of cryptocurrencies. Her sentiments shed a positive light on the country’s crypto journey, as the country had earlier banned cryptocurrencies.

Crypto adoption in Africa

The level of cryptocurrency adoption in Africa has seen notable growth this year. Tanzania is currently following in the footsteps of Nigeria that announced it would be launching an eNaira. The country is already developing this CBDC, and as aforementioned, it was the first African country to launch this offering.

An earlier report issued by Chainalysis stated that Africa was leading as the largest retail market for cryptocurrency products. While cryptocurrencies are largely not regulated across the continent, the level of penetration is high.

Nigeria is currently the largest crypto market in Africa. However, a directive issued by the country in February stated that cryptocurrencies were banned. Moreover, the country’s central bank is also restricting people’s bank accounts suspected of transacting in crypto.

Cryptocurrencies have become good crypto investments in developing countries because of the rising levels of inflation.  Besides Africa, the level of crypto adoption is also high in Central American countries.

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