Tanzania: Crypto Trading Compliance Remains Elusive

Despite having no legal framework to regulate cryptocurrencies, Tanzania’s Bank of Tanzania (BoT) has taken a stern stance on digital currencies.

History of Stance Against Cryptocurrencies

In 2017, the Director of National Payment Systems at BoT stated that cryptocurrencies are not recognized in the country and warned citizens against using them. The following year, the bank issued notices prohibiting the use of cryptocurrencies, stating that the Tanzanian Shilling remains the only acceptable legal tender in the country.

Risks Involved with Investing in Cryptocurrencies

The Assistant Manager of the Safe Custody Centre at BoT cautioned investors to be aware of the risks involved in investing in cryptocurrencies, warning that they may lose all their capital. The National Payments System Act No. 4 of 2015 prohibits digital payments, and Section 15 requires individuals to obtain a license or approval from the BoT before issuing an electronic payment system.

Regulatory Uncertainty Persists

While there are no regulations specifically governing digital currency in Tanzania, the Bank of Tanzania is reportedly studying internet currencies with a view to finding a permanent regulatory solution. Despite this, regulatory uncertainty persists, leaving investors and miners unclear on what to expect.

Tanzania’s Crypto Mining Industry

Tanzania has emerged as a significant player in cryptocurrency mining, ranking 72nd out of 249 countries and boasting a crypto-related activity rating of 3.9/10. The country’s electricity consumption for cryptocurrency mining is expected to surpass its non-crypto related consumption per year.

Global Uncertainty Surrounding Cryptocurrency Mining

The uncertainty surrounding the legality of cryptocurrency mining remains a pressing issue globally, with most jurisdictions yet to enact laws governing digital currencies. In Tanzania, regulatory uncertainty persists, leaving investors and miners unclear on what to expect.

Seek Professional Guidance

For more information on the legal status of cryptocurrencies worldwide, visit Freeman Law’s website or contact them for a consultation.