The Bank of Tanzania is looking at the feasibility of developing the country’s own central bank digital currency (CBDC). At a recent finance conference in Tanzania’s capital of Dodoma, central bank Governor Florens Luoga confirmed that the central bank is planning to expand its CBDC research and development team capacity.
“To ensure that our country is not left behind the adoption of central bank digital currencies, the Bank of Tanzania has already begun preparations to have its own CBDC,” Luoga said. “As part of preparations Tanzania is strengthening the capacity of central bank officials on digital currencies and expanding research,” he added.
However, he advised citizens to exercise caution in digital currency dealings and noted that the country also plans to diversify its foreign exchange reserves.
The central bank governor made speculations for the inflation rates and economic growth, stating that the inflation rate is likely to remain within the 3-5% target rate between this year and next year. While the economic growth could reach an annual average of 8% over the next five years.
Digital currency in Africa
Digital currency in Africa is gradually progressing, both in development and in mainstream adoption. One of the largest countries in Africa, Nigeria, recently released its digital currency, the eNaira.
Nigeria President Muhammadu Buhari said adopting the digital currency and its underlying technology can increase its gross domestic product (GDP) by $29 billion over the next ten years.
Since its launch on October 25, the eNaira platform already has 2.5million daily visits, 33 registered banks, N500 million (US$1.2 million) minted digital currency. With over 2,000 registered customers since its launch last October, said Central Bank of Nigeria (CBN) Governor Godwin Emefiele.
Besides, Emefiele said e-Naira will support the physical naira, which has dropped by 5.6% this year despite efforts by the CBN to stabilize the currency. “The eNaira and the physical naira will have the same value and will always exchange at one naira to one e-Naira,” he said.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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