Tanzania’s government is planning to develop a central bank digital currency (CBDC) in order to protect its population from cryptocurrency speculators.
“It’s critical for us to establish a central bank digital money as a safe alternative since cryptocurrency speculators are affecting many people,” central bank governor Florens Luoaga said.
This follows the Bank for International Settlements’ declaration that 90 percent of central banks are considering launching a digital currency with sovereign backing.
Nigeria set the benchmark for African countries in October when it launched the eNaira, a digital currency, while China’s digital yuan was launched in the nation’s capital earlier this year.
Luoga originally mentioned forming a CBDC at the 20th Conference of Financial Institutions in November. “The Bank of Tanzania has already began preparations to create its own Central Bank Digital Currencies (CBDCs) to ensure that the country does not fall behind in the adoption of CBDCs,” he stated.
Tanzania dispatched officials to other nations to learn from experts in CBDCs, such as Nigeria.
The central bank of Nigeria announced the expansion of its eNaira utility, allowing bill payments to be made via the CBDC.
“There will be an upgrade on the eNaira fast wallet app starting next week that will allow you to execute transactions such as paying for DSTV or energy bills or even paying for airplane tickets,” the bank’s controller stated.
When asked what the difference is between internet banking and using the eNaira, he stated that the eNaira has no transaction fees.
Cryptocurrencies were prohibited by Tanzania’s central bank in 2019, as cryptocurrencies not backed by fiat money have no legal status in the country.
Later, the president retracted his statement, stating that the country must prepare for a new era of blockchain and cryptocurrency.
Governor Luoga has not stated when Tanzania will launch its CBDC. “We cannot ignore digital currency issued by central banks.” “Almost everywhere, central bank governors are training right now and discussing how to bring it out,” he said.