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Tanzania’s Central Bank working on President Hassan’s cryptocurrency directive

Tanzania's Central Bank has said that it is working on President Samia Suluhu Hassan's call to prepare for cryptocurrencies.

This comment comes after President Hassan admitted that the digital currency in Tanzania was inevitable.

“In the financial sector, we have witnessed the emergence of blockchain technology or cryptocurrency,” Hassan said during the opening of a new central bank branch in the northern town of Mwanza this month.

“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.”

Her comments point to a possible reversal of a ban Tanzania’s government put in place in 2019.

President Hassan, who became head of state after the death of her predecessor in March, said this shortly after El Salvador became the first country in the world to adopt bitcoin as a legal tender.

The move by El Salvador has generated a fresh debate over the role of cryptocurrencies in economies and remittance transfers.

In November 2019, Tanzania’s Central Bank banned cryptocurrencies. At the time, the Central Bank said cryptocurrency was not recognised by local law. However, it now says it is adapting following the president’s comments.

“The bank is working on the directives given,” a Bank of Tanzania spokesperson told Reuters. However, the spokesperson failed to give further details.

The Chairman of Tanzania Bankers’ Association, Abdulmajid Nsekela, applauded President Hassan’s call as the $63 billion economy still relies heavily on cash transactions.

“The most challenging element for regulators is to be caught by surprise by innovations,” he said.

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

Analyst at Tellimer, Faith Mwangi, cautioned that progress might be slow.

“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 Uganda is an example where President Yoweri Museveni made a similar call in 2017, but the central bank is yet to lift the ban on cryptocurrencies.

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