TANZANIA’S significant transformation in its finance landscape driven by the rise of digital assets is a new opportunity for the country's large unbanked and underbanked populations, an expert has observed.

Susan Ponera, country manager for Yellow Card Tanzania, a leading cryptocurrency exchange in Africa, noted that while mobile money has already achieved widespread adoption in the country, digital assets are set to further enhance access to financial tools, especially in remote and underserved areas.

“This shift is particularly evident in urban centers like Dar es Salaam, where the adoption of digital assets is reshaping how businesses and individuals manage investments, cross-border transactions, and financial inclusion,” she said in an interview.

To support this transition, educational initiatives are rapidly expanding. Ponera noted that Yellow Card has launched the Yellow Card Academy, which provides free resources on cryptocurrency, Blockchain, and financial literacy. “This initiative is crucial for bridging the knowledge gap and empowering Tanzanians to engage with digital currencies confidently,” she explained.

Academic institutions are also contributing to this development. The University of Dar es Salaam (UDSM) now offers Blockchain courses, equipping students with essential knowledge about digital currencies and preparing them for a future where these technologies will play an increasingly significant role.

Despite these advancements, Tanzania’s digital asset market faces considerable challenges. The Bank of Tanzania (BoT) has issued warnings about cryptocurrency volatility and fraud while exploring the sector's potential to revolutionize financial services. Ponera noted that recent regulatory changes, including the introduction of a digital asset tax under the Finance Act of 2024, mark a step towards acknowledging the economic role of digital assets. However, the lack of specific laws governing crypto currencies leaves the market in a regulatory gray area.

The BoT’s cautious approach reflects both the promise and risks associated with digital assets. Although the Anti-Money Laundering Act has been amended to include virtual asset service providers, the absence of clear regulations creates uncertainty for users and investors.

The 3-percent withholding tax on digital asset transfers and exchanges could potentially hinder growth, driving local investors away from licensed platforms like Yellow Card in favour of unregulated alternatives.

She noted Tanzania’s e-commerce sector expands; digital assets could emerge as a preferred payment option. Cryptocurrencies offer a fast and secure method for transactions, which may encourage more online activity and spur the growth of the digital economy.

She said Tanzania’s adoption of digital assets presents promising opportunities, it also requires careful consideration of regulatory frameworks and market dynamics to fully harness its potential.