With cryptocurrency adoption heavily on the rise in different forms around the world, Tanzania is one of the countries looking at a Central Bank Digital Currency (CBDC) as a safe option to onboard its citizens into Web3.
Much as a date for the CBDC launch has still not been confirmed, the Governor of the Bank of Tanzania, Florens Luoga affirmed in an interview on May 9th that a CBDC is in the works.
According to Governor Luoga, the CBDC will redirect the people’s growing interest in crypto away from privately issued crypto-assets that are largely influenced by speculation that has led to losses for many.
As the top cryptocurrencies continue to drop in value, Luoga shared how he believes that a Central Bank issued digital currency will give users a more secure and reliable substitute than the cryptocurrencies currently on the market.
Luoga added that the Central Bank cannot remain unaffected or behind in the face of all the financial technological advancements brought about by blockchain and cryptocurrencies.
“Almost worldwide, central bank governors are in training right now and holding discussions on how to bring it about,” Luogo remarked as he described how the Bank of Tanzania has sent officials to countries whose CBDC projects are in more advanced stages.
Tanzania had initially issued a cryptocurrency ban in 2019 but since then the President and Central Bank Governor have been quoted saying they cannot ignore the growing presence of digital currencies as their country needs to prepare for the new age of blockchain and crypto.
Crypto in Africa – Tanzania will launch its own digital currency
According to the Bank of International Settlements, 9 out of 10 Central Banks around the world are exploring the prospects of having their own digital currency. The Tanzanian Central Bank governor has been enthusiastic about CBDCs having first mentioned them at the country’s 20th Conference of Financial Institutions in November 2021.
Other African countries researching the development of CBDCs include Kenya, Rwanda, Ghana, Tunisia, Eswatini and Zambia which announced its plans in February 2022.
These countries would be looking to follow the path charted by Nigeria which launched its CBDC, the e-Naira in October 2021. Nigeria is currently looking to expand its payment utility options and upgrade the speed of transactions within the e-Naira wallet app.