The government of Zanzibar has opened a blockchain sandbox to encourage tech startups, according to a local press report. The semi-autonomous region of the United Republic of Tanzania is calling its sandbox the National Blockchain Sandbox. 

The sandbox will allow developers to test innovative technologies on the National Blockchain Network. Projects that feature financial inclusion, identity verification and certification issuance will have priority, Kenyan Wall Street  reported .

Supporting tech innovation

Admission to the sandbox will come with the added potential benefits of government-sponsored training and incubator programs. Director General of the e-Government Authority of Zanzibar Said Seif Said explained:

“Innovators will have the opportunities to work on pilot projects, collaborate with experts, and receive mentorship from industry leaders, which is very critical.” 

The sandbox was designed by Dubai-based LedgerFi IT and will operate on the EVM-compatible layer-1 XDC network.

Zanzibar’s new blockchain sandbox aims to drive tech startup growth image 0

Source: XDC Network News

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A gradual spread of blockchain technology

The Bank of Tanzania (BOT)  introduced  a legal framework for fintech sandboxes in July after a year of preparations. The regulations include eligibility requirements and application procedures and stipulate a nine-month testing period. There are about 75 fintech startups in Tanzania.

In 2023, 24.4 million people, or 72% of Tanzanian adults,  used  mobile money services, compared to 7.5 million people, or 22%, who used commercial bank services. A total of 18.7% of the population was considered “financially excluded.”

The BOT warned against using or trading cryptocurrency in 2019, saying the Tanzanian shilling is the country’s only legal tender. However, there are no regulations on crypto use and, as of 2023, 1.7% of Tanzanian adults had invested in cryptocurrencies and 9.7% were aware of them.

However, in June, Tanzanian think tank Governance & Economic Policy Centre  noted  in a report: 

“Kenya and Tanzania are so far reported as having the largest number of crypto entrepreneurs and transaction volumes in East Africa. These statistics are however not official.”

Zanzibar reportedly  considered adopting cryptocurrency  independently of the national government in 2021, after Tanzanian President Samia Suluhu Hassan  expressed support for it .


The BOT considered issuing a central bank digital currency but  remained “cautious” about it  after concluding research in 2023. The central bank  announced  a second round of research in June. 

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