From Mobile Payment to Digital Fiat Currency

Ranjo Denbow, SVP Communications, eCurrency

Photo: Bank of Tanzania


The wide adoption and high usage of electronic money in Tanzania are well known internationally. The country’s 17 million active mobile payment accounts transact TZS68 trillion in 2016, the equivalent of more than 60% of Tanzania’s GDP.

Tanzania is currently in the critical stages of evaluating the emerging innovations in digital financial services including digital fiat currency, in adding value to the success stories of financial inclusion in Tanzania. James Masoy, Manager, Oversight and Policy Department, Directorate of National Payment Systems of the Bank of Tanzania, discussed the adoption of digital fiat currency in the context of Tanzania as an emerging economy at the ITU Focus Group on Digital Currency including Digital Fiat Currency (FG DFC) on October 12, 2017 in Beijing, China.


Mr. Masoy defined digital fiat currency as the digital form of fiat money, authorized by government regulation or law, and is part of the base money supply, being transacted alongside physical forms of currency. It is a highly secure digital instrument. It is a means of payment, a unit of account and a store of value, like paper bank notes. It is a digital bearer instrument that can be stored, transferred and transmitted by all digital payments systems and services. The validity of the digital fiat currency is independent of the digital payments systems storing and transferring this secure digital instrument.

The adoption of digital fiat currency in Tanzania will be driven by need for liquidity in digital payments ecosystem, instant settlement, oversight, supervision, and interoperability between Banks, nonbanks, networks agents and merchants. The need of the general public and companies to have access to central bank money will continue to be there in the future.

Mr. Masoy shared data showing Tanzania’s Mobile Payment growth and the progress made with relation to digital financial services and interoperability. He sees the focus group work will help developing countries to better understand the benefits, impact, and shared experience on implementations. Like with mobile money, Tanzania may consider approaching adoption of digital fiat currency using the test the innovation, monitor and regulate policies approach. The ITU Focus Group will assist in guiding Tanzania and other nations towards the evolution to a digital fiat currency.

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