Abrupt turnaround to crypto underway in Tanzania following President’s directive

    30 Jun 2021

    The Сentral bank of Tanzania is working on President Samia Suluhu Hassan’s directive to prepare the country for cryptocurrencies, as Reuters reported. It might point to a reversal of a local law banning digital assets it put in place in November 2019.

    Tanzania may now be on the cusp of a crypto turnaround after the country’s new president issued directives to embrace the promising industry.

    In 2019, Tanzania’s Central Bank referred to local law as a reason for barring digital assets. Now, the Bank of Tanzania says the ban to be withdrawn after crypto-friendly statements from President Samia Suluhu Hassan.

    The first female President, who was sworn in March, said during the opening of a new central bank branch in Mwanza this month that she wants her country to be prepared for the rise of cryptocurrencies.

    “In the financial sector, we have witnessed the emergence of Blockchain technology or cryptocurrency. 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,” she claimed.

    President’s claims contrast with the position of her predecessor John Magufuli, who was fighting foreign gold miners and even conflicted with Kenya over market access.

    A central bank spokesperson said that working on the President’s directives is already underway. He did not respond whether the bank going to adopt common cryptocurrencies like Bitcoin or issue its own digital currency as China has done.

    Experts warn that progress could be so fast. According to Reuters, Tanzania has a $63 billion economy with a heavy share of cash transactions.

    Abdulmajid Nsekela, Tanzania Bankers’ Association chairman, welcomed Hassan’s push saying: “The most challenging element for regulators is to be caught by surprise by innovations.”

    Gradual preparations would help the central bank assess the risks and come up with ways of addressing them in advance, he added.

    Faith Mwangi, an analyst at Tellimer, pointed to Uganda, where President Yoweri Museveni made similar claims yet in 2017, but the central bank still has not recalled its restriction on crypto assets.

    “The change in tone from Tanzania’s president is clear, but wait to see whether the central bank will take concrete steps towards embracing cryptocurrencies,” Mwangi said.

    Hassan’s comments followed after El Salvador had become the first country in the world to adopt Bitcoin as a legal tender, while a number of Latin American countries reportedly were looking toward using the benefits of cryptocurrencies.

    Source: https://www.reuters.com/technology/tanzania-cbank-says-it-is-working-presidents-cryptocurrency-push-2021-06-25/

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