Blockchain Beyond Borders: Rethinking Tanzania's Legal and Regulatory Framework for the Digital Age (East African Journal of Law and Ethics)

Summary

• In 2019, the Bank of Tanzania issued a public notice cautioning against the use, marketing, and trading of cryptocurrencies, declaring the Tanzanian Shilling as the sole legal tender.p.6
• Tanzania's Electronic Transactions Act provides legal recognition for electronic records under Section 5 and electronic signatures under Sections 18 to 24, but omits definitions for distributed ledger technology.p.4
• In Commercial Case No 12171 of 2024, the High Court of Tanzania held that the absence of a specific regulatory framework does not automatically render cryptocurrency transactions unlawful.p.7
• The authors recommend enacting the Tanzania Blockchain and Digital Assets Act to establish clear rules for DLT, VASPs, smart contracts, and tokenised assets.p.9

Key insights

1. Existing digital governance laws in Tanzania were created for centralized e-commerce systems and fail to address decentralized ledger architectures.p.2
2. The Electronic Transactions Act recognizes electronic contracts but lacks provisions governing smart contract formation, code errors, or automated execution.p.4
3. Blockchain immutability creates structural conflict with the Personal Data Protection Act regarding data subjects' rights to correct or erase personal data.p.5
4. Tanzania maintains regulatory ambiguity by taxing digital asset transactions under the Finance Act 2024 while cautioning against crypto trading.p.6
5. The absence of statutory frameworks for Virtual Asset Service Providers exposes Tanzania to anti-money laundering and illicit financial flow risks.p.7
6. Institutional responsibility for blockchain is fragmented among the Bank of Tanzania, communications regulators, financial intelligence units, and tax authorities.p.8
7. Establishing a regulatory sandbox would allow regulators to observe blockchain payments, smart contracts, and digital identity applications in a controlled environment.p.10