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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.&nbsp;
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&nbsp;<a data-ct-non-breakable="null" href="https://kenyanwallstreet.com/zanzibar-develops-blockchain-sandbox-to-support-tech-startups/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">reported</a>.
<h2 id="supporting-tech-innovation">Supporting tech innovation</h2>
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:
<blockquote>
 “Innovators will have the opportunities to work on pilot projects, collaborate with experts, and receive mentorship from industry leaders, which is very critical.”&nbsp;
</blockquote>
The sandbox was designed by Dubai-based LedgerFi IT&nbsp;and will operate on the EVM-compatible layer-1 XDC network.
<figure><img alt="Zanzibar’s new blockchain sandbox aims to drive tech startup growth" src="https://s3.cointelegraph.com/uploads/2024-10/0192ba9e-8b72-715e-a37a-52bc47b183d8" title="">
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 Source: <a data-ct-non-breakable="null" href="https://x.com/XDCNetwork_News/status/1848600798432788662" rel="noopener noreferrer nofollow" target="_blank" text="null" title="https://x.com/XDCNetwork_News/status/1848600798432788662">XDC Network News</a>
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Related:&nbsp;<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/xdc-network-gets-japanese-foothold-via-partnership-with-sbi-subsidiary" rel="noopener noreferrer nofollow" target="null" text="null" title="null">XDC&nbsp;Network gets Japanese foothold via partnership with SBI subsidiary</a>
<h3 id="a-gradual-spread-of-blockchain-technology">A gradual spread of blockchain technology</h3>
The Bank of Tanzania (BOT)&nbsp;<a data-ct-non-breakable="null" href="https://kenyanwallstreet.com/sandbox-regulations-to-ease-tanzanias-fintech-penetration-approved/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">introduced</a>&nbsp;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,&nbsp;<a data-ct-non-breakable="null" href="https://www.fsdt.or.tz/wp-content/uploads/2023/07/FinScope-Tanzania-2023-Full-Report-Insights-that-Drive-Innovation.pdf" rel="noopener noreferrer nofollow" target="null" text="null" title="null">used</a>&nbsp;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 &amp; Economic Policy Centre&nbsp;<a data-ct-non-breakable="null" href="https://gepc.or.tz/digital-currencies-and-future-monetary-policy-in-ea-how-governments-can-address-the-downside-of-cryptocurrency-to-advance-financial-inclusion-in-east-africa/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">noted</a>&nbsp;in a report:&nbsp;
<blockquote>
 “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.”
</blockquote>
Zanzibar reportedly&nbsp;<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/tanzania-s-zanzibar-reportedly-exploring-ways-to-adopt-crypto" rel="noopener noreferrer nofollow" target="null" text="null" title="null">considered adopting cryptocurrency</a>&nbsp;independently of the national government in 2021, after Tanzanian President Samia Suluhu Hassan&nbsp;<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/tanzanian-president-urges-central-bank-to-prepare-for-crypto" rel="noopener noreferrer nofollow" target="null" text="null" title="null">expressed support for it</a>.
 The BOT considered issuing a central bank digital currency but&nbsp;<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/tanzania-cautious-on-cbdc-adoption-after-initial-research" rel="noopener noreferrer nofollow" target="null" text="null" title="null">remained “cautious” about it</a>&nbsp;after concluding research in 2023. The central bank&nbsp;<a data-ct-non-breakable="null" href="https://www.thecitizen.co.tz/tanzania/business/bot-considers-further-study-on-digital-currencies-4657958" rel="noopener noreferrer nofollow" target="null" text="null" title="null">announced</a>&nbsp;a second round of research in June.&nbsp;
Magazine:&nbsp;<a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/bitcoin-senegal-why-how-african-country-using-btc/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Bitcoin in Senegal: Why is this African country using BTC?</a>
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Zanzibar’s new blockchain sandbox aims to drive tech startup growth

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