According to reports, Tanzania’s top financial sector officials have called for a clearer global consensus on Central Bank Digital Currencies (CBDCs) and crypto assets.
The calls were made by Finance and Planning Minister, Mwigulu Nchemba, and Bank of Tanzania (BoT) Governor, Prof Florens Luoga, at a virtual conference organized by the central bank and IMF as Tanzania continues to contemplate the direction to take on the subject of cryptocurrencies.
As to its direction, the Finance and Planning Minister revealed that the Bank of Tanzania is ‘finalising preparations of a business case for establishment of a CBDC in Tanzania and evaluation of crypto assets after recording significant progress’ in formalising digital financial services.
The Governor, on his part, pointed out the need for effective regulations as cryptocurrencies have become common with various consequences, with the IMF saying that its role is to promote the establishment of a ‘strong, comprehensive, and consistent regulatory framework.’
IMF, which was represented by Deputy Managing Director, Bo Li, however, added that it ‘neither encourages nor discourages’ countries to issue CBDCs but provides technical assistance to those that choose to do so on design features that support public policy objectives alongside efficient, resilient, and competitive payment systems.
Moreover, the Bretton Woods institution maintained that central banks in each country are expected to determine their own main objectives before embracing CDBCs ‘as there is no across-the-board formula for all countries.’ The institution also advised that it is important to ensure a balance between protecting consumer privacy and promoting financial inclusion and integrity.
According to the IMF, many residents in Africa use P2P platforms as their primary on-ramp into cryptocurrency often because they lack access to centralized exchanges