By Alicia Maher
The wave of digital tokens has reached a lot of countries in the world today. The message, which began with cryptocurrencies, has now spread to central banks. Around the world, quite a number of central banks are now either planning to or have launched their Central Bank Digital Currencies (CBDCs). Africa seems to be one of the most CBDC-keen continents.
According to reports from Tanzania, the Bank of Tanzania is willing to launch its digital currency soon. This was made known by the governor of Tanzania’s apex bank, Florens Luoga. Luoga said that the BoT has initiated protocols to begin the project that could see Tanzania join the growing league of African countries that are embracing digital token technology.
On Thursday, governor Luoga said that BoT would follow in the steps of Nigeria to launch its digital currency, the Digital Shilling. He said that the country is willing to explore digital token technology in driving economic development. If it does happen, Tanzania could become the first East-African country to launch its CBDC.
Bloomberg reported this development yesterday, Friday. According to the report, preparations are ongoing and there is no fixed date for the project to be launched. However, the tone of the report suggests that the government is willing to fast-track the project to ensure speedy completion and launch. Bloomberg reported that Tanzania would also explore other digital currencies while developing its central bank’s capacity.
From Asia to Africa, CBDCs Are Growing
The Bahamas made history when it became the first country in the world to launch its digital token in 2020. China followed in September 2021 with its CBDC. The token was launched in September, but testing began as early as April 2020. The People’s Bank of China said that it would push for global acceptance of its CBDC for transactions.
A few weeks after the launch, a report emerged about foreign companies in China being “strongly encouraged” to begin accepting the Digital Yuan. analysts also noted that the launch came up in time for the 2022 Beijing Winter Olympics which would see an influx of foreigners to China.
But outside Asia, in a surprising move, African countries began to embrace the concept of having digital versions of their currencies. In quick succession, Nigeria and Ghana announced the launch of their CBDCs, the e-Naira, and e-Cedi respectively. While the progress of both projects is slow, future expectations are high.
And now, governor Luoga has said that the Bank of Tanzania was inspired by Nigeria’s e-naira to begin working on its digital token. Despite Tanzania’s ban on cryptocurrencies, the government has decided to embrace CBDCs as a way of exploring the digital asset space. Although the president, Samia Suluhu, said in June that the country would prepare to accept crypto.
Africa has one of the highest cryptocurrency penetration rates in the world. Yet, In Africa, many countries frown at or ban cryptocurrency investments. It would be interesting to see which digital asset class, cryptocurrencies of CBDCs, wins the race of global adoption.