A recent report from Bloomberg has stated that Tanzania is working on building its own digital cryptocurrency. The country will be following the footsteps of other countries globally that are looking towards CBDCs.
The report stated that Tanzania was already preparing for the development of a CBDC. The report stated that the country was developing this currency out of the Fear of Missing Out and feeling left out of the fast-growing crypto space.
Tanzania to build a CBDC
According to the Central Bank of Tanzania Governor Florens Luoga, the country was already creating a CBDC. “To ensure that our country is not left behind the adoption of central bank digital currencies, the Bank of Tanzania has already begun preparations to have its own CBDC.”
Tanzania will be joining Nigeria that has already taken solid steps to develop a CBDC. Nigeria was the first country in Africa to venture into CBDCs, with plans to unveil an eNaira.
Tanzania has also stated that it does not plan for its CBDC to be used as legal tender. Rather, this digital currency will complement the Tanzanian shilling. Moreover, the Tanzanian authorities are still sceptical about cryptocurrencies and urging people to be cautious when investing in these assets because of the high volatility risk.
In the mid of 2021, Tanzania showed a positive attitude towards cryptocurrencies. The current president of the country, Samia Suluhu Hassan, announced that the country’s central bank was preparing for digital assets.
While she did not directly endorse cryptocurrencies, she noted that the crypto sector and blockchain technology were fast-growing and that Tanzania needed to be prepared for these developments.
Cryptocurrency adoption in Africa
Developing economies are leading in terms of cryptocurrency adoption. This could be attributed to the rising inflation rates in these countries wherein people prefer to store their wealth in the form of crypto instead of fiat.
Currently, the countries that are leading the way in CBDC development are smaller economies. The Bahamas has already launched a CBDC. These countries are developing these currencies with the help of private companies.
In Africa, Nigeria and South Africa are leading the way in the adoption of cryptocurrencies. However, cryptocurrencies are banned in Nigeria, and the country’s central bank is cracking down on bank accounts believed to transact in crypto.
