Block chain means is a decentralized digital ledger technology that securely records and stores data across a network of computers: Examples of Blockchain: Cryptocurrencies, Digital Identity.
It enables secure, transparent, and low-cost transactions, blockchain eliminate intermediary fees and reduce transaction times, making it easier for individuals and small businesses to engage in financial activities. Also, decentralized finance (DeFi) applications built on blockchain can provide innovative savings and credit solutions, allowing users to earn interest on their deposits and access loans without traditional banking barriers thus improves financial inclusion, stimulate economic growth, and empower Tanzanians. E.g. In June 2021, our Hon. President Samia Suluhu Hassan acknowledged the growing influence of digital currencies and urged the BoT to prepare for potential crypto adoption.
It reduces corruption in both public and private sectors e.g. land registration and public procurement, blockchain ensures that records are easily accessible, verifiable, and resistant to tampering, fosters trust among stakeholders, the traceability of goods in supply chains, particularly in agriculture, enables consumers and businesses to verify the origin and quality of products, thereby promoting fair trade practices and strengthening market dynamics.
Blockchain ensures that all transactions and data entries are permanently recorded and cannot be altered or deleted without consensus, thereby reducing the risk of fraud, e.g. financial transactions, where integrity of records is crucial for fostering trust among citizens, investors, and government entities thus, implementing blockchain leads to improved governance and a more stable investment climate, ultimately contributing to the country's economic development.
Current laws do not address the unique aspects of blockchain, such as data privacy, smart contracts, and digital asset management, leading to uncertainty for businesses and investors. There is also a need for collaboration among stakeholders, including government agencies, financial institutions, and technology providers, to establish clear guidelines and standards that promote a secure and efficient blockchain ecosystem while addressing issues related to fraud, cybersecurity, and consumer protection. E.g. In November 2019, the Bank of Tanzania issued a public notice reaffirming that the only acceptable legal tender in Tanzania is the Tanzanian Shilling. It also advised the public against trading, marketing and usage of virtual currency as it was contrary to existing foreign exchange regulations
The country's internet penetration remains low, particularly in rural areas, which hinders the ability to access and utilize blockchain-based applications effectively, lack of digital literacy create barriers to understanding and adopting these technologies, as potential users may not have the necessary skills to navigate blockchain platforms or comprehend their benefits. This knowledge gap hinders the adoption of blockchain solutions also, misconceptions and a lack of technical expertise creates. resistance to change, limiting investment opportunities and slowing down the development of supportive policies and regulations.
Cybercriminals exploit weaknesses in smart contracts or decentralized applications, undermining users' trust and security. Also, limited cybersecurity awareness and expertise among stakeholders can exacerbate risks, making it difficult to safeguard digital assets and personal information.
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