REGULATION | Bank of Tanzania Approves First Stablecoin Sandbox Pilot

The Bank of Tanzania has approved the country’s first stablecoin sandbox pilot, allowing fintech firm, NEDA Labs, to test nTZS, a Tanzanian Shilling-pegged stablecoin, within the central bank’s fintech regulatory sandbox framework.

The approval comes ~2 years after the launch of the regulatory sandbox.

The 3-month pilot will assess the

• issuance,
• transfer, and
• redemption

of the nTZS tokenised stablecoin under controlled regulatory supervision, according to the approval framework released by the central bank.

The stablecoin must remain fully backed 1:1 by Tanzanian Shilling-denominated reserves at all time with all customer-facing settlements will continue to be conducted exclusively in local currency, the Tanzanian Shillings (TZS).

According to the financial regulator:

“The stablecoin shall not constitute legal tender in Tanzania, and its use shall be restricted solely to approved sandbox participants.

No

• monetary creation,
• parallet currency issuance, or
• staking and yield-generating activities

shall be permitted durin the sandbox period without separate written approval from the bank.”

The testing period shall be structured and phased sub-periods of 3 months each, with a milestone review conducted before each subsequent phase commences.

The Fintech Regulatory Sandbox Regulations 2024 offer a structured framework for fintech startups to pilot their products, services, or business models in a controlled environment. The regulations include:

• Detailed criteria for eligibility
• Application procedures
• Financial solution requirements, and
• Ongoing supervision by the Bank of Tanzania

The move signals a broader shift in how regulators across emerging markets are approaching digital assets with authorities increasingly opting for controlled experimentation rather than outright restrictions.

Sandbox frameworks have become a preferred regulatory approach for studying digital asset infrastructure in live market conditions while maintaining oversight around

• compliance,
• settlement processes and
• financial stability risks.

The approval also highlights the growing collaboration between regulators and fintech firms across Africa as governments explore the role of blockchain-based payment infrastructure in the continent’s evolving digital finance sector.

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