The Central Bank of Tanzania is now doing its homework to find new ways through which the country can embrace cryptocurrencies, and thus overturn its earlier limitation on cryptocurrency activities in the country.
A Bank of Tanzania spokesperson told Reuters that the bank was working on a new directive from President Samia Suluhu Hassan, who directed the reverse of its earlier ban on cryptos. The president directed the bank to instead, find ways through which the country can embrace the technology.
The new direction the country is taking to embrace cryptocurrencies and blockchain shows how “leadership matters,” said Antonio Pompliano – a popular Bitcoin teacher, author, and founder of Morgan Creek Digital hedge fund.
“In the financial sector, we have witnessed the emergence of blockchain technology or cryptocurrency,” said President Samia Suluhu Hassan.
“Many countries in the world have not accepted or started using these currencies. However, I would like to advise the central bank to start working on those issues. Just be prepared.”
The bank banned cryptocurrencies in 2019 saying they were not recognized by the law. It, therefore, discouraged citizens and companies from involving themselves in similar deals.
This is encouraging news for crypto communities in the country given that most East African countries, including Kenya and Uganda, have their central bank warning their citizens against crypto deals. They mostly cite the lack of protection to investors.
A crypto mining hotspot in East Africa
Regarding crypto activities in Tanzania, the country has a large cryptocurrency mining sector. In fact, it is rated 72 out of the 249 countries actively involved in mining cryptocurrencies.
However, it remains to be seen what the Central Bank of Tanzania is working on regarding this matter. If the bank is to pursue a crypto-conscious regulatory framework, it takes time to develop one. In this case, they would have to start from zero since none exists. In fact, part of the role would be to make changes to the country’s National Payments System Act No. 4 of 2015 (the NPS) which prohibits digital payments. It requires anyone issuing an electronic payment system to have a license or approval from the Bank of Tanzania.
Plus crypto experts and traders in the country worry that the country may not be ready for all this. For instance, they point to the fact that Tanzania does not have a broker, or investment, or trade advisers in matters regarding cryptocurrencies. Many also may be discouraged by the volatile nature of cryptocurrencies.