Key takeaways:
- The Bank of Tanzania has completed a study on cryptocurrencies and is awaiting government guidance before finalizing a regulatory framework for digital assets
- Governor Emmanuel Tutuba said the rules will cover virtual assets, cryptocurrencies and stablecoins
- The move marks a sharp reversal from the central bank’s 2019 stance, when it warned the public against trading cryptocurrencies
The Bank of Tanzania has completed a study on cryptocurrencies and is now awaiting government guidance before moving ahead with a formal regulatory framework for digital assets.
The Governor of the apex bank, Emmanuel Tutubais, closed the development while speaking at the central bank’s pavilion during the 50th Dar es Salaam International Trade Fair.
“We are currently finalising the preparation of laws and regulations for the supervision of digital assets, particularly virtual assets, cryptocurrencies and stablecoins, so that we can strengthen regulation and oversight,” Tutuba said.
Tutuba said the framework is intended to keep Tanzania in step with global financial innovation while protecting financial stability and consumers, noting that digital assets are being adopted worldwide at a pace that makes regulation increasingly necessary.
He said the decision to develop formal rules followed rising public interest in cryptocurrencies, particularly among young people, alongside a growing number of complaints from investors who have lost money.
“Many young people are investing in this area, but we have also received complaints from people who have lost money. We are therefore looking at how to put in place an enabling environment that will protect Tanzanians from further harm,” he said.
Money laundering risks are shaping the rules
Tutuba said virtual assets present risks that require proper oversight to protect both investors and the country’s financial system. “These are areas that carry many risks, and in some cases, they are used for money laundering and terrorist financing. That is why we are preparing regulations so that those participating in these activities will operate in accordance with the guidelines that will be issued,” he said.
He said any regulatory framework would aim to balance innovation with risk management, addressing concerns around money laundering, fraud, consumer protection and the integrity of the financial system.
A reversal from Tanzania’s 2019 stance
The development marks a significant shift from the central bank’s earlier position. In 2019, the Bank of Tanzania issued a public notice warning against trading or using cryptocurrencies, stating they were not recognized as legal tender and that their use contravened existing foreign exchange regulations.
President Samia Suluhu Hassan has previously urged the central bank to prepare for growing adoption of digital assets and blockchain technology, encouraging regulators to keep pace as financial technologies evolve.
The central bank has already taken preliminary steps in that direction, approving its first stablecoin sandbox pilot earlier this year to allow a licensed fintech firm to test a Tanzanian shilling-pegged stablecoin under regulatory supervision.
No timeline has been announced for the new rules. But the completion of the BoT’s study, combined with the ongoing sandbox pilot, suggests Tanzania is moving closer to establishing its first comprehensive regulatory framework for cryptocurrencies.