Tanzania’s central bank plans to launch its own digital currency.
The Bank of Tanzania has begun preparations for a CBDC
Bank of Tanzania Governor Florens Luoga announced the news at the 20th Conference of Financial Institutions (COFI) organized by the central bank. He said, “the Bank of Tanzania has already started preparations for its own CBDC” to ensure that the country does not fall behind in the adoption of CBDCs. Luoga also said the central bank was looking to build the capacity of its CBDC research and development team.
The Bank of Tanzania remains wary of cryptocurrencies and discourages the public from investing in them as they are not legal. In addition to launching a CDBC, the central bank also plans to buy gold from local refiners to diversify its foreign exchange reserves.
Tanzania’s plans are similar to the eNaira
Luoga compared Tanzania’s plans to the eNaira, which Nigeria launched in October to reduce transaction costs and encourage participation in the formal financial system. The Naira complements the country’s physical currency and does not replace it. It was developed by fintech company Bitt, which works with the Central Bank of the Eastern Caribbean on its digital currency.
In February this year, the Central Bank of Nigeria banned financial institutions from providing services to crypto trading platforms. As part of the order, the central bank directed commercial banks to identify and close accounts associated with cryptocurrency trading.