Tanzania is planning to launch CBDC
Tanzania’s central financial authority, the Bank of Tanzania, has reportedly been planning to introduce a central bank digital currency (CBDC) for the African nation following the announcement of similar initiatives in its neighbouring countries. According to a Bloomberg report on November 26, Bank of Tanzania’s Governor, Florens Luoga, had shared on Thursday that Tanzania is in plans of following Nigeria’s example to roll out its own CBDC.
Luoga informed that the central bank has “already begun preparations” for a digital shilling, which has been Tanzania’s currency since 1966. In addition to the preparations for launching a CBDC, the Bank Governor has said that the country has also been planning of expanding research into digital currencies as well as strengthening the capacity of central bank officials. If the above turns into a successful venture, Tanzania would find space among a select group of countries that are currently exploring CBDCs.
Many industry experts have been on the lookout that China would lead the way to the next CBDC launch, from among major world economies. The Chinese central bank has reportedly been conducting trials in its major cities since April 2020, with a proposed larger test at the 2022 Beijing Winter Olympics.
According to Luoga, Tanzania’s central bank CBDC initiative has been driven by Nigeria’s launch of its own CBDC, the eNaira, which was launched in October. The CBDC eNaira is only the second that has been made fully available to the public after the Bahamas was recorded as the first nation in the world that launched a central bank digital currency back in October 2020.
After the November 2019 directive from Tanzania’s central bank, cryptocurrencies have been largely banned in the country. Digital assets were not recognized as per local law; the bank had notified its citizens. However, the Bank of Tanzania is now working to overturn this ban after its President Samia Suluhu Hassan had stated in June that the country “should be preparing for crypto.”