Tanzania Calls for Distinct Global Consensus on Crypto Assets, CBDCs

The financial authorities of Tanzania are awaiting a global outlook on cryptocurrencies and central bank digital currencies (CBDCs). The East African country does not wish to be hasty in taking any step towards embracing or rejecting the crypto sector due to a lack of clarity in the international stance. Mwigulu Nchemba, the Minister of Finance of Tanzania, along with its central bank governor, Florens Luoga, asked for global clarity on crypto during a virtual summit organised by the Bank of Tanzania and the International Monetary Fund (IMF).

The summit aimed at opening discussions around the crypto sector and the interoperability of CBDCs among countries situated in the Sub-Sahara Africa.

As per Nchemba, Tanzania is making some progress in the CBDC development. “[The central bank is] finalising preparations of a business case for [the] establishment of a CBDC in Tanzania and evaluation of crypto assets after recording significant progress,” Bitcoin.com quoted Nchemba as saying.

Luoga, on the other hand, called for tighter regulations as crypto assets become increasingly popular and common in Tanzania.

Statistics show that several African nations have adopted the crypto culture, increasing their interaction with the sector. The crypto market in Nigeria, Kenya, Tanzania, and South Africa together saw a growth of 1,200 percent, reaching a market valuation of $105.6 billion (roughly Rs. 775 crores) in one year, a report by Chainalysis claimed in September last year.

Other nations like India, UK, Australia, UAE, and the US have shown their stance on the crypto sector in recent months, by drafting rules around it rather than restricting it completely like China. Let along rules on crypto holding and trading, Russia is working to see the best ways to regulate the crypto mining sector in its country.

The IMF however, is known to have shown its resistance towards the expansion of the crypto space.

In November last year, the IMF expressed its concerns on El Salvador's economic stability after it adopted cryptocurrency Bitcoin as a legal tender in September 2021.

Recently, IMF signed a deal with Argentina that bought the nation some time to pay off the $45 million (roughly Rs. 342 crore) debt it owes the Washington, DC-based global financial body.

One of the conditions from IMF on this deal was to refrain Argentina from promoting cryptocurrencies in the country. This conflicted outlook on crypto is likely to have triggered Tanzania's call for a global consensus.

Meanwhile, the Financial Stability Board, which groups regulators, central banks, and finance ministry officials from the G20 economies, is also looking at what needs to be done with cryptocurrency assets.