The Bank of Tanzania (BoT) is preparing to introduce a comprehensive legal and regulatory framework for cryptocurrencies, stablecoins and other virtual assets, marking a significant policy shift from its previous anti-cryptocurrency stance toward a regulated digital asset ecosystem.
Bank of Tanzania Governor Emmanuel Tutuba confirmed that the central bank has completed the foundational study for the framework and is awaiting final government guidance before formally rolling out the new regulations.
The upcoming framework represents a notable departure from the BoT’s 2019 position, when the central bank discouraged the public from dealing in cryptocurrencies because they were neither recognized nor regulated under Tanzanian law.
Instead of discouraging participation outright, the central bank is now seeking to establish a structured regulatory environment that allows innovation while ensuring market participants operate under strict oversight. The policy evolution has been influenced by growing digital asset adoption, increasing global regulatory developments and government efforts to position Tanzania competitively within Africa’s expanding fintech sector.
New Rules to Focus on Consumer Protection and Market Stability
According to the central bank, the forthcoming regulations will be built around several key objectives. A major priority is investor protection, particularly as cryptocurrency trading gains popularity among younger Tanzanians who remain vulnerable to scams, excessive speculation and significant financial losses.
The framework will also strengthen measures against money laundering, terrorist financing and fraud, requiring digital asset businesses to implement robust compliance systems similar to those used by traditional financial institutions.
In addition, regulators intend to establish clear operational guidelines for virtual asset businesses, replacing the current legal uncertainty with formal licensing, supervision and reporting obligations. Rather than restricting blockchain innovation, the BoT also aims to create what it describes as an enabling environment for responsible technological development, including regulatory sandbox initiatives such as Tanzania’s proposed Shilling-backed stablecoin project.
Momentum toward regulation has been reinforced by a landmark High Court ruling involving cryptocurrency platform Yellow Card. The court clarified that although cryptocurrencies are not legal tender in Tanzania, trading them is not inherently illegal under existing laws.
The judgment highlighted the absence of comprehensive legislation governing digital assets and effectively increased pressure on policymakers to establish a clear regulatory framework for the growing sector. The upcoming rules are therefore expected to close this legal gap while providing certainty for investors, financial institutions and technology companies.
The regulatory reforms also align with President Samia Suluhu Hassan’s earlier directive encouraging the central bank to prepare Tanzania for blockchain technology and digital finance. The President urged regulators to study emerging financial technologies to ensure Tanzania remains competitive as digital payments, tokenization and decentralized finance continue expanding globally. That policy direction has gradually shifted government thinking from caution toward controlled innovation supported by appropriate safeguards.
The new framework will also complement Tanzania’s broader monetary policy objectives, particularly recent measures aimed at protecting the Tanzanian Shilling. The government has intensified enforcement against the domestic use of foreign currencies, including restrictions on pricing goods and services in US dollars.
Under the proposed crypto regulations, this policy is expected to extend into digital asset markets. Local cryptocurrency exchanges are likely to be prohibited from quoting crypto assets against the US dollar for domestic transactions, with trading pairs instead denominated in Tanzanian Shillings (TZS). The approach is intended to reduce unofficial dollarization while strengthening the role of the national currency in both traditional and digital financial markets.
Crypto Exchanges Face Major Operational Changes
Once implemented, the framework is expected to fundamentally reshape how cryptocurrency exchanges operate in Tanzania. The country will introduce a Virtual Asset Service Provider (VASP) regime that transitions digital asset businesses from operating in a regulatory grey area into a fully supervised financial ecosystem.
- Licensing and Capital Requirements
Digital asset platforms will be required to obtain regulatory approval before operating legally. Authorities are expected to introduce mandatory licensing requirements alongside minimum capital thresholds and liquidity standards designed to enhance financial resilience and protect customer funds.
The move mirrors regulatory developments taking shape across East Africa, where policymakers are increasingly seeking to professionalize the digital asset industry.
- Stronger Anti-Money Laundering Controls
Licensed exchanges will also be expected to implement comprehensive anti-money laundering (AML) and counter-terrorism financing (CFT) measures. These may include:
- Mandatory Know Your Customer (KYC) verification using national identification systems.
- Elimination of anonymous trading accounts.
- Ongoing transaction monitoring.
- Mandatory reporting of suspicious transactions to Tanzania’s Financial Intelligence Unit (FIU).
The measures are designed to align Tanzania with international financial crime prevention standards while improving confidence in regulated digital asset markets.
- Improved Banking Access
The regulatory framework could also transform relationships between cryptocurrency companies and commercial banks. Since the BoT’s 2019 warnings, many banks have been reluctant to facilitate crypto-related transactions due to legal uncertainty.
A formal licensing regime is expected to provide the regulatory clarity necessary for banks to offer corporate accounts, payment services and API integrations to licensed exchanges, strengthening fiat on- and off-ramps for digital assets.
- Tax Compliance Becomes Easier
The framework is also expected to support enforcement of Tanzania’s existing 3% digital asset withholding tax introduced under the Finance Act. Licensed exchanges will likely be required to automatically calculate, deduct and remit the tax to the Tanzania Revenue Authority (TRA), reducing compliance gaps while improving government revenue collection.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.