The approval marks a significant shift in Tanzania’s approach to digital assets, as the central bank moves from caution toward controlled experimentation with blockchain-based payments while keeping strict oversight on monetary stability and local currency use
The Bank of Tanzania has approved the country’s first stablecoin sandbox pilot, allowing fintech firm NEDA Labs to test a Tanzanian shilling-pegged digital token under the central bank’s regulatory framework.
The three-month pilot will test the issuance, transfer and redemption of the nTZS stablecoin within the Bank of Tanzania’s fintech regulatory sandbox, according to the approval framework released by the regulator.
The approval comes nearly two years after the launch of the sandbox initiative, which was designed to allow fintech companies to test new financial products under regulatory supervision.
Under the framework, the nTZS stablecoin must remain fully backed one-to-one by reserves denominated in Tanzanian shillings, while all customer-facing settlements will continue to be conducted exclusively in the local currency.
“The stablecoin shall not constitute legal tender in Tanzania, and its use shall be restricted solely to approved sandbox participants,” the central bank said.
“No monetary creation, parallel currency issuance, or staking and yield-generating activities shall be permitted during the sandbox period without separate written approval from the bank,” it added.
The testing programme will be conducted in phased three-month periods, with milestone reviews before any extension into subsequent phases.
The central bank introduced the Fintech Regulatory Sandbox Regulations 2024 to provide a framework for startups to pilot products and services in a controlled environment, including rules on eligibility, application procedures and ongoing supervision.
The move reflects a broader shift among regulators in emerging markets toward controlled experimentation with digital assets rather than outright restrictions.
Sandbox programmes have increasingly become a preferred tool for regulators seeking to study blockchain-based financial infrastructure in live market conditions while maintaining oversight of compliance, settlement processes and financial stability risks.
The approval also highlights growing collaboration between African regulators and fintech firms as governments across the continent explore the use of blockchain-based payment systems in digital finance.
Faustine Ngila is the AI Editor at Impact Newswire, based in Nairobi, Kenya. He is an award-winning journalist specializing in artificial intelligence, blockchain, and emerging technologies.
He previously worked as a global technology reporter at Quartz in New York and Digital Frontier in London, where he covered innovation, startups, and the global digital economy.
With years of experience reporting on cutting-edge technologies, Faustine focuses on AI developments, industry trends, and the impact of technology on society.
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