Precaution sounded on risky digital currencies

SAULI GILIARD

THE Bank of Tanzania (BoT) will shortly issue a policy directive on the usage of cryptocurrency -- digital designed currencies, including famous Bitcoin, the ‘Daily News’ can exclusively reveal.

However, the management of the central bank has warned wananchi to exercise absolute care when using the computer-generated currencies, and preferably avoid them, since they are not under any regulator in the world.
BoT’s revelation has been prompted by a drop in the value of the famous digital currency, Bitcoin; having dropped sharply to $16,563 and then $12,191 close to Christmas Day, after having shot to as high as $19,000 on some exchanges. But data compiled by Bloomberg, an online platform that delivers business and markets news, data, analysis and video worldwide, shows that the Bitcoin dropped by almost 40 per cent.
Responding to ‘Daily News’ questions, BoT’s Director of National Payment System, Mr Bernard Dadi, said like other financial institutions, Tanzania’s central bank was closely monitoring online digital currencies, including Bitcoin, and had put its senior staff through capacity building sessions focused on cryptocurrencies.
“Cryptocurrency experts from United Kingdom have already conducted workshops for the BoT management and senior staff on these currencies,” the director explained.Mr Dadi revealed that before issuing the policy directive, the ongoing process covers approval of some recommendations resulting from workshops that covered BoT Board members.
He said the governor had already warned members of the public against using Bitcoin, pointing out that “the currency is not recognized in the country and whoever uses it will not get any assistance from BoT should anything happen.” As Bitcoin’s value soared in November, Indonesia Central Bank announced that it was planning to ban the cryptocurrency to protect its currency, rupiah.
Since the money is generated from computerized codes, some analysts believe that, security of the digital currencies was not reliable. While some investors have welcomed the cryptocurrency, some market analysts are skeptical while others believe that it is just a ‘bubble burst’.
June, 2017, the online site, CCN, wrote that cryptocurrencies are gradually being discovered in Africa as its report cited countries like South Africa, Ghana, Kenya, Botswana, Zimbabwe and Nigeria, where a semblance of digital currencies, including Bitcoin, was manifest.