Tanzania Cryptocurrency Laws Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
In 2017, the Director of National Payment Systems of the Bank of Tanzania (BoT) stated that cryptocurrencies are not recognized in the country, and people who uses it will not be assisted if something happen. In the following years, the Bank of Tanzania banned the use of cryptocurrencies, stating through Notices that “The only acceptable and used legal tender in the country is the Tanzanian Shilling”. In addition, the Assistant Manager of the Safe Custody Centre at the Bank of Tanzania commented that investors in cryptocurrencies should be aware that they run the risk of losing all their capital. [1]
Also, Tanzania’s National Payments System Act No. 4 of 2015 (the NPS) prohibits digital payments, Section 15 of the NPS provides that a person shall not issue an electronic payment system without a license or approval from BoT. [2]
There’s no legal framework in Tanzania to regulate cryptocurrencies through the Bank of Tanzania. However, the according to the Bank of Tanzania, the institution is currently studying internet currencies with a view to finding a permanent regulatory solution.” [3] Therefore, Tanzania has not currently enacted regulations or legislation specifically regulating digital currency yet. [3]
Despite the lack of regulations, Tanzania reportedly has a large cryptocurrency mining sector and is rated 72 out of the 249 countries that are actively involved in digital currency mining, with its crypto-related activity ranked at 3.9/10. [4] In consequence, Tanzania’s electricity consumption in cryptocurrency mining is predicted to amount to more than the entire country’s non-cryptocurrency-related electricity consumption per year. [5]
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
[1] Tanzania issues warning against cryptocurrencies, (Feb. 28, 2018). https://www.theeastafrican.co.ke/tea/business/tanzania-issues-warning-against-cryptocurrencies-1385026
[2] National Payments System Act. No. 4 of 2015. Available at https://tanzlii.org/tz/legislation/act/2015/4-0
[3] Bitcoin poses Challenges as Bot Calls for Caution, (Mar. 7, 2018). https://www.thecitizen.co.tz/News/BoT-urges-caution-amid-bitcoin-craze/1840340-4331594-sv04b6z/index.html
[4] Cryptocurrency Analysis, “Ultimate crypto investment safety rankings”, (Jun. 2, 2021). Available at https://cointobuy.io/countries/tanzania.
[5] Bitcoin Miners Are Giving New Life to Old Fossil-Fuel Power Plans, WSJ, (Mar. 21, 2021). Available at https://www.wsj.com/articles/bitcoin-miners-are-giving-new-life-to-old-fossil-fuel-power-plants-11621594803
