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Due to emerging of Internet technology ,it resulted to digital currency,cryptocurrency
The Theaim of the studywas to assess the potentials and threats of cryptocurrency in
the financial system in Tanzania. Specifically, the research aimed; to identify the types
of actors in criptocurrency market, assessing the economic and social potentials of
Crypto Currency, to assess the possible threats of cryptocurrency in the existing
financial system, and to assesthe legal and regulatory framework for managing
cryptocurrency in the Tanzanian financial system. An inductive research approach was
adopted by this study with surveyed 40 respondents who were financial officials while
the questionnaire was used as a data collecting tool.
The researcher revealed thetypes of actors in thecryptocurrencyfinancial
systeminclude but not limited to; miners, coin owners, market makers, retail traders,
and consumers. Cryptocurrency does not require a third party during a financial
transaction, provides anonymity to individuals, cryptocurrencies they guarantee more
efficiency and ensures high security. Cryptocurrencies affect real monetary systems;
they cause fluctuation in virtual currency value, they affect money laundering in the
financial system, cryptocurrencies cause black market in the financial system,
cryptocurrencies exacerbate tax evasion, that cryptocurrency encourages illegal
activities. Currently, in Tanzania cryptocurrencies are not regulated under any law and
that cryptocurrency is not legal tender and that users face the risk of unenforceability
of cryptocurrency transactions as policymakers are cautious that cryptocurrency would
be used for illegal activities, such as money laundering, trade-in illegal or controlled
substances, or terrorism finance.
Finally, the researcher recommends that financial officers should/to put much effort in
studying about matters that affect their work to acquire skills and experience, financial
institutions particularly Bank of Tanzania to propose and develop a safe way of using
cryptocurrency without compromise the financial system and the Tanzanian
government to adapt appropriative rules and regulations that can prohibit
cryptocurrency usage. |
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