Tanzania intends to develop its own central bank digital currency (CBDC), after similar moves in numerous emerging nations, notably Nigeria, the continent’s first.
According to a Bloomberg story published on Saturday, Tanzania may be following a cue from Nigeria by expediting its plans to adopt its own CBDC.
Central bank governor Florens Luoga stated that preparations for the launch of the digital shilling – Tanzania’s currency since 1966 — are now underway.
Don’t want to be left out
Fear of missing out, or FOMO, has prompted more countries to accept the establishment of central bank digital currencies, as national currencies – in contrast to their crypto equivalents, such as Bitcoin and Ethereum, which are not pegged to fiat currency.
Multiple industry analysts believe China will pave the path for the next big global economy to adopt a CBDC. Since April 2020, the country’s central bank has performed experiments in major cities and is planning a larger test during the 2022 Winter Olympics in Beijing.
Tanzania has effectively outlawed cryptocurrency use following a November 2019 decree from the country’s central bank declaring the digital assets to be illegal under local law.
Tanzania’s own CBDC
The Bank of Tanzania, on the other hand, is apparently attempting to reverse this prohibition, following President Samia Suluhu Hassan’s June statement that the country should be preparing for crypto.
“To ensure that our country does not fall behind in the adoption of central bank digital currencies, the Bank of Tanzania has already begun plans to establish its own CBDC,” Luoga said Thursday during a finance conference in Dodoma.
Meanwhile, Luoga noted that the central bank is considering purchasing gold from local refineries to diversify its foreign exchange reserves.
“The monetary gold that we intend to purchase should be at least 99.5% pure,” he said.
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