Tanzania Central Bank Reportedly Begins Exploring A CBDC

As per the reports, Tanzania has initiated examining the possibility of a CBDC (central bank digital currency). The respective country is moving after Nigeria (which introduced its digital currency in the recent month. Other countries from Africa have likewise declared strategies to launch their CBDCs.

Tanzania gets into CBDC

A report of Bloomberg on Friday stated that Florens Luoga (the Governor of Bank of Tanzania) declared the strategies regarding the CBDC of the country on Thursday during the 20th COFI (Conference of Financial Institutions). He added that their country is not lagging in the matter of a CBDC’s adoption as some preparation has already been initiated by the Bank of Tanzania regarding the country’s CBDC. Accordingly, the governor mentioned that the bank is additionally pursuing to increase examination of the subject of the digital currencies as well as to enhance its group’s capacity.

He moved on to explain that the country got inspiration from Nigeria’s issuance of a CBDC named eNaira in the recent month. Nigeria collaborated with a Germany-based FinTech for a digital currency’s launch to be utilized in association with the existing physical naira. The West Africa-based country counted to be the second which authoritatively has a CBDC following the Bahamas (which introduced one in the recent year). The governor further pointed out that the country’s central bank is devising a strategy to incorporate a variety in its cross-border exchange reserves.

In this respect, he said, it will purchase gold from native refineries. The planned monetary gold to be purchased should contain a purity percentage of up to 99.5%. He correspondingly presumes the inflation rate of the country to remain lower than the specified 3 to 5 percent during 2021-22. Luoga revealed that the bank is even now apprehensive about cryptocurrency, and he stated that it is presently illegal (to warn people against investing in it).

Since 2019, there is a ban over cryptocurrency across Tanzania following the statement of the central bank saying that the country’s law does not recognize it. Nonetheless, this may get modified shortly as the bank is operating on rolling back this prohibition. The respective development has resulted from the order of Samia Suluhu Hassan (the country’s president) to get ready for cryptocurrencies right after his placement as the president.

Digital currency advancement in African nations

Governments are one after the other, entering the CBDC field. In the case of Africa, the adoption of CBDCs is gradually surging. Nigeria is considered to be the earliest country in Africa to introduce its CBDC. Other such countries in the continent are also looking for the potential chances for the provision of CBDCs for the economies thereof.