Crypto Overview in Tanzania

Regulatory data is for informational purposes only and may not reflect the most current legal developments. Always consult qualified professionals before making decisions.

Legal Classification and Regulatory Framework

Cryptocurrency Status

Tanzania occupies a unique position in cryptocurrency regulation, defined by a growing tension between its central bank’s longstanding caution and a series of developments in 2024 and 2025 that have begun to shift the legal landscape. The Bank of Tanzania (BoT) issued a public notice in November 2019 cautioning the public against trading, marketing, and using virtual currencies, asserting that the Tanzanian Shilling is the sole legal tender under sections 26 and 27 of the Bank of Tanzania Act No. 4 of 2006. Transacting in any currency other than the legal tender is an offence under Tanzanian monetary law. No parliamentary legislation, however, expressly bans or criminalises cryptocurrency ownership or trading as a standalone act.

A landmark High Court decision in December 2024, Yellow Card Tanzania Limited v. Nyamwero Michael Nyamwero (Commercial Case No. 12171 of 2024 HCTZ), delivered the most significant judicial statement on crypto legality in Tanzania to date. The Court upheld a USD 1.193 million settlement in favour of Yellow Card, a licensed crypto trading company, ruling that cryptocurrency trading “is not illegal.” The Court’s reasoning was direct: since digital asset transactions are taxed under Tanzanian law, they cannot be declared unlawful. This precedent, while not a legislative authorisation, provides meaningful legal grounding for contract enforcement involving virtual assets.

Adding statutory depth, the Finance Act 2024 (effective 1 July 2024) introduced the first formal definition of “digital assets” in Tanzanian law, covering cryptocurrencies, token codes, numbers held in digital form generated through cryptographic means, and non-fungible tokens. This definition was introduced for tax administration purposes and represents the first legislative acknowledgment of the digital asset class in Tanzania.

Tax Treatment

The Finance Act 2024 introduced a 3% withholding tax on digital asset transfers, codified under Section 83C of the Income Tax Act, Cap. 332. The obligation applies to resident or non-resident persons who own a digital asset exchange platform or facilitate the exchange or transfer of digital assets, who must withhold at 3% on payments made to resident persons. Platform operators and transfer facilitators are designated as withholding agents responsible for collection and remittance to the Tanzania Revenue Authority (TRA).

Beyond the withholding tax, profits from cryptocurrency sales or exchanges are subject to capital gains tax. For crypto trading conducted as a business activity, the standard corporate income tax rate of 30% applies to resident corporations. Individual taxpayers face a progressive personal income tax rate with a top marginal rate of 30%. Non-resident individuals are generally taxed at a flat 15% on Tanzanian-source income. The TRA has not publicly issued detailed operational guidance on cost-basis methodology or the tax treatment of staking and mining income.

Regulatory Oversight

Several agencies exercise overlapping jurisdiction over aspects of digital asset activity. The Bank of Tanzania serves as the primary financial regulator with authority over monetary policy, payment systems, and financial stability. The Capital Markets and Securities Authority (CMSA) regulates securities markets under the Capital Markets and Securities Act but has not issued specific guidance on virtual assets or security tokens. The Tanzania Communications Regulatory Authority (TCRA) governs electronic communications and requires licensing for cryptographic service providers under the Electronic Transactions Act 2015. The Financial Intelligence Unit (FIU), established under the Anti-Money Laundering Act 2006 and operating under subsequent amendments in 2022 and 2023, handles suspicious transaction reporting and incorporates virtual asset service providers (VASPs) into Tanzania’s AML/CFT framework.

Despite this multi-agency landscape, no single regulator has established a comprehensive VASP registration or licensing regime. Cryptocurrency exchanges serve Tanzanian users without formal BoT authorisation, though the Bank has taken no publicised enforcement action against them.

Business Environment

Banking Relationships

The BoT’s 2019 public notice implicitly discourages banks from facilitating cryptocurrency transactions, though no explicit circular formally prohibiting banks from serving crypto businesses has been publicly confirmed. In practice, cryptocurrency activity in Tanzania occurs primarily through mobile money platforms such as M-Pesa, Tigo Pesa, and Airtel Money, and through peer-to-peer channels, rather than through direct bank-to-exchange integrations. The Yellow Card court case demonstrated that at least some crypto businesses maintain operational banking relationships within the country, and the High Court’s ruling has reduced the legal uncertainty that previously surrounded such arrangements.

Innovation Support

Tanzania has taken meaningful steps toward fostering fintech innovation. The BoT launched its Fintech Regulatory Sandbox under the Fintech Regulatory Sandbox Regulations 2024 (Government Notice No. 540 of 2024), with the first application window opening in December 2024. The first cohort launched in January 2025 and included blockchain-based applications among its areas of activity. A second cohort opened in October 2025, with quarterly application cycles established as the ongoing cadence. The sandbox is grounded in the Bank of Tanzania Act No. 4 of 2006 and operates as a test-and-learn environment for financial products not yet fully covered by existing regulation.

Separately, Zanzibar launched a National Blockchain Sandbox in October 2024 through a partnership between the XDC Network and LedgerFi. This initiative targets financial inclusion, identity verification, and certification issuance, with government-sponsored training and incubator programmes. The BoT has also been conducting research into a potential central bank digital currency (CBDC) since January 2023. The CBDC study was completed in mid-2025, and as of late 2025, the Bank was awaiting government direction on whether to proceed with establishing a legal framework for a two-tier electronic Tanzanian Shilling (eTZS).

Crypto License in Tanzania

Tanzania has no dedicated VASP licensing framework as of 2026. No standalone crypto business registration regime exists, and the Bank of Tanzania has not created a formal pathway under the National Payments System Act No. 4 of 2015 or any other instrument for cryptocurrency service providers to obtain operating authorisation. Operators entering or currently active in the Tanzanian market must navigate a gap between the BoT’s 2019 cautionary notice and the practical reality that digital asset activity is taxed, not prosecuted.

Current Status

Cryptocurrency businesses operate in Tanzania without formal licensing. The Finance Act 2024 obliges platform operators to act as withholding agents for the 3% digital asset transfer tax, effectively requiring registration with the Tanzania Revenue Authority (TRA) for tax compliance purposes, but this does not constitute a VASP licence or an operating permit. The Electronic Transactions Act 2015 mandates licensing for cryptographic service providers through the Tanzania Communications Regulatory Authority (TCRA), though this provision is directed at cryptographic infrastructure rather than exchange or custody services in the conventional sense. No VASP-specific sandbox track has been confirmed under the BoT Fintech Regulatory Sandbox, though the programme is open to blockchain-based applications on a case-by-case basis.

Why No Framework

Tanzania’s regulatory gap reflects several overlapping factors. The BoT retains a cautious monetary policy stance, grounded in concerns about money laundering, terrorism financing, and the risk of counterfeit digital assets. The Bank of Tanzania Act is explicit that the Tanzanian Shilling is the only legal tender, creating a structural tension with any formal recognition of private digital currencies as regulated instruments. Regulatory bandwidth has also been absorbed by the multi-year process of addressing FATF grey-list deficiencies, which required reforms across AML/CFT supervision, beneficial ownership transparency, and enforcement. Tanzania was removed from the FATF grey list on 13 June 2025 after the FATF noted substantial progress at its Strasbourg plenary. With that process concluded, capacity for a dedicated VASP regime has arguably increased.

At the legislative level, the Finance Act 2024 introduced statutory recognition of digital assets for tax purposes without resolving the underlying regulatory status, creating what legal analysts describe as an unsustainable contradiction: businesses are taxed on activities that have no formal operating authorisation. The High Court’s December 2024 ruling in Yellow Card v. Nyamwero has added pressure on the BoT and Parliament to provide clarity.

What Operators Should Know

Until a dedicated VASP framework is enacted, operators are advised to comply with existing AML/CFT requirements under the Anti-Money Laundering Act 2006 and its 2022 and 2023 amendments, which explicitly cover VASPs. Tax registration with the TRA is required to fulfil Section 83C withholding obligations under the Income Tax Act. TCRA licensing under the Electronic Transactions Act 2015 applies to cryptographic service providers. Businesses considering formal establishment should monitor the BoT Fintech Regulatory Sandbox, which offers a potential supervised entry point for blockchain-based financial products. Legal counsel with experience in both Tanzanian financial regulation and the East African Community (EAC) regional framework is advisable given the pace of change in the sector.

Market Characteristics

Adoption Patterns

Despite regulatory uncertainty, Tanzania has seen substantial cryptocurrency adoption. According to the FinScope Tanzania 2023 Report, 1.7% of adults have invested in cryptocurrencies while 9.7% demonstrate awareness of digital assets. Tanzania reportedly ranks among the top 20 countries globally for crypto adoption, driven primarily by peer-to-peer trading and remittance use cases rather than institutional infrastructure. The country’s widespread mobile money ecosystem, anchored by M-Pesa, Tigo Pesa, and Airtel Money, provides a familiar digital payments layer that has lowered barriers to cryptocurrency entry. An estimated 75 fintech startups currently operate in Tanzania.

Industry Focus

Tanzania’s cryptocurrency landscape is predominantly driven by peer-to-peer trading and cross-border remittances. The Zanzibar blockchain sandbox signals interest in enterprise blockchain applications, particularly for trade documentation, identity verification, and financial inclusion. Tanzania’s geographic position as an East African logistics and trade hub, combined with the EAC Cross-Border Payment System Masterplan approved in May 2025, which explicitly acknowledges cryptocurrencies and fintech innovations, creates potential pathways for blockchain-based trade facilitation and regional payment integration.

Regulatory Evolution

Tanzania’s regulatory trajectory has accelerated since 2024. The Finance Act 2024’s statutory recognition of digital assets, the launch of the BoT Fintech Regulatory Sandbox, the completion of the CBDC study, and the Yellow Card High Court ruling collectively signal a jurisdiction in transition toward structured regulation rather than sustained prohibition. Tanzania’s removal from the FATF grey list in June 2025, after being placed on increased monitoring in October 2022, has strengthened its international financial credibility and may create momentum for further financial reform including a formal VASP framework.

Within the East African Community, Tanzania sits between Kenya’s comprehensive VASP Act (No. 20 of 2025, commenced November 2025) and the more limited approaches of Uganda and Burundi. Regional harmonisation efforts are active, with the EAC Cross-Border Payment System Masterplan providing a policy foundation for integrating regulated digital assets into cross-border settlement. At the continental level, the African Continental Free Trade Area’s ADAPT initiative is developing shared digital infrastructure for cross-border payments using stablecoins and interoperable digital identities, which Tanzania’s growing fintech sector is positioned to engage with as regulatory conditions develop.