crypto

The legality of trading Bitcoin and cryptocurrencies in general in Tanzania is unclear.

In November 2019, the Bank of Tanzania (BOT) issued a public notice warning the public against trading, marketing, and using virtual currencies, including Bitcoin.

The central bank stated that these activities are contrary to the existing foreign exchange regulations and that the only legal tender in Tanzania is the Tanzanian shilling.

The notice reads: “The Bank of Tanzania, as stipulated in Sections 26 and 27 of the Bank of Tanzania Act, 2006, is the sole institution in Tanzania mandated to issue banknotes and coins and to declare a legal tender in the country. The Bank of Tanzania, therefore, reiterates that the only acceptable and used legal tender in the country is the Tanzanian Shilling. Other foreign currencies are traded by licensed institutions in the country in line with applicable foreign exchange regulations where the currencies could be issued and redeemed in the country of issuance as legal tender.”

However, the BOT has not taken any enforcement action against individuals or businesses that trade Bitcoin or cryptocurrencies as there is still, to date, no specific regulation for the use of cryptocurrencies in Tanzania.

Interestingly, in June 2021, Tanzania’s President Samia Suluhu Hassan said that cryptocurrencies and blockchain were the future and urged BOT to pave the way for change.

“We have witnessed the emergence of a new journey through the internet. The Central Bank should be ready for the changes and not be caught unprepared,” she said.

However, BOT did not make any advance so far.

Its last reference in regard to crypto was made in December 2022 by Prof. Florens Luoga, Governor of the Bank of Tanzania (at that time), who said: “As far as we know cryptocurrencies are not safe. We cannot give timelines when to issue regulations, we are still researching–we will give regulations when we have finished our research”.

Meanwhile, in January 2023, the Directorate of Financial Deepening and Inclusion of BOT issued a public notice to provide an update on its intentions to issue a central bank digital currency (CBDC), indicating that the Bank will continue to monitor, research, and collaborate with stakeholders, including other central banks, in the efforts to arrive at a suitable and appropriate use and technology for the issuance of Tanzanian shillings in digital form

Since then, BOT has issued no other notice or update in regard to cryptocurrencies in Tanzania.

Currently, there are a number of cryptocurrency exchanges that allow Tanzanian users to buy, sell, and trade Bitcoin and other cryptocurrencies.

The use of these exchanges is not illegal, but it is important to note that the BOT does not regulate them.

According to the FinScope Tanzania 2023 Report, 1.7% of adult Tanzanians have invested in cryptocurrencies and 9.7% are aware of them.

Last updated: 20th July 2023