Tanzania is edging closer to introducing a central bank digital currency (CBDC) to help counter the rising popularity of cryptocurrencies in the East African nation.
“It’s important for us to provide a central bank digital currency as a safe alternative because many people are being affected by cryptocurrency speculators,” Bank of Tanzania governor Florens Luoga said in an interview in Dar es Salaam. “The bank can’t ignore the technological advancement of money,” he added.
Luoga spoke in reference to introducing a CBDC for payments similar to Nigeria, which was the first African country to start using the digital cash in October. China, the Bahamas, the Central African Republic, Kenya, Zambia and Ghana are among the other nations that are issuing, piloting or studying consumer-facing digital currencies.
Nine in 10 central banks are exploring creating their own digital currencies, according to the bank of International Settlement. Governments are considering CBDCs as national currency — unlike their crypto counterparts, such as bitcoin and ether, which are not tied to fiat currency.
Tanzania has sent its officials to countries with more experience in CBDCs, including Nigeria, to learn from them, Luoga said. He declined to say when Tanzania’s may be introduced.
“We cannot ignore central bank digital currencies,” Luoga said. “Almost worldwide, central bank governors are in training right now and holding discussions on how to bring it about.”