A Programmable Shilling That Thinks and Earns Is Emerging in Tanzania
Blockwisely Insider Talks
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In Kariakoo, Dar es Salaam’s most famous market, a trader can wait days to pay a supplier abroad and lose up to 8% in the process. That friction has defined cross-border trade in Africa for decades.
Now imagine that same payment settling in minutes, at a fraction of the cost.That’s the bet Tanzania is beginning to test.
Inside the Bank of Tanzania’s regulatory sandbox, a different version of stablecoins is taking shape: a local currency, on-chain, designed to plug into the system rather than route around it.
A milestone like this doesn’t happen quietly. Credit is due to David Machuche and the NEDA Labs team, who have done what most only talk about: getting a local currency stablecoin into a central bank testing environment.
But the real shift is not just how money moves.The real breakthrough isn’t faster payments. It’s when money starts earning for everyone, not just banks.
In this model, idle Tanzanian shillings don’t just sit in wallets, they can potentially earn sovereign-backed yield through instruments like government T-bills, turning everyday balances into productive assets. That shift quietly reframes financial inclusion: not just access to money, but access to what money can do.
At the center of that experiment is nTZS.
Blockwisely sat down with David Machuche, co-founder of NEDA Labs, to understand what happens when a currency goes on-chain, and what it could mean for the future of money, payments, and financial inclusion in Africa.
Regulatory Sandbox
Blockwisely:What key lessons did you learn from entering Tanzania’s central bank sandbox with nTZS, and how do you rate the country’s current crypto regulatory framework
Machuche:The most important lesson is that regulators are not your adversaries. They are your most important partners and in Tanzania’s case, the Bank of Tanzania has proven to be genuinely thoughtful about digital innovation. The sandbox framework they built is sophisticated. The 30-page testing parameters they gave us cover everything from FATF Travel Rule compliance to quantum stress testing scenarios. This is not a government that does not understand what we are building. They understand it very well and they want it to succeed within a framework that protects ordinary Tanzanians.
The practical lesson for other African builders: engage early, engage honestly, and over-communicate. We did not wait for a perfect product before approaching BOT. We went in with a working prototype, a clear explanation of how every shilling would be tracked and protected, and a willingness to accept conditions. That earned trust. Many builders in Africa avoid regulators because they assume the answer will be no. In our experience the answer is more often, tell us more.
On Tanzania’s broader crypto regulatory framework it is more progressive than people outside the country realise. The BOT sandbox regulations from 2024 are well-constructed. GN 198, which mandates all domestic transactions in Tanzanian Shillings, creates a natural regulatory tailwind for a TZS stablecoin that most people outside Tanzania have not yet understood. The Electronic Matching System that launched on May 18th this year formalises the interbank FX market in a way that complements on-chain infrastructure rather than competing with it. Tanzania is building the regulatory stack methodically. My advice to builders: do not underestimate it.
Local vs USD Stablecoins
Blockwisely: Where is the real utility of local-currency stablecoins like nTZS becoming undeniable in Tanzania right now – merchant payments, remittances, savings, or elsewhere?
Machuche: Merchant payments and trade finance, these are where the case for a TZS stablecoin becomes completely undeniable, and it is not a future argument. It is happening now.
Every market trader in Kariakoo, every electronics importer in Gongo la Mboto, every textile buyer who sources from China, they all face the same problem. They hold TZS. Their suppliers want payment in something that works across borders. The traditional path is TZS to USD via a bank, SWIFT transfer, 2 to 4 days, 5 to 8 percent total cost. With nTZS, that path becomes: TZS into nTZS, swap to USDC, route via global PSP to the supplier, under 3 minutes, under 0.5 percent. The utility is not theoretical. The first time a trader sees that comparison on a piece of paper the conversation is over.
Remittances are the emotional story but merchant payments are the volume. Tanzania imports billions of dollars of goods from China annually and the payment friction is enormous. That is where nTZS changes lives at scale.
The savings case is the one I am most excited about long term. Tanzania’s BOT T-bills pay 9 to 12 percent annually. That yield has never been accessible to ordinary Tanzanians holding mobile money balances. The idea that your idle TZS, sitting in a wallet the same way you already use M-Pesa can earn sovereign yield automatically, is a genuinely new thing. When that is live* and properly explained, adoption will be faster than anything we have seen in East African digital finance.
Risks
Blockwisely: Which risk concerns you most: liquidity fragmentation between national stablecoins, differing national regulations, or building public trust?
Machuche: Liquidity fragmentation is the real structural risk and I do not think enough people are talking about it honestly. If every African country issues a local currency stablecoin in isolation, without interoperability protocols, without shared liquidity infrastructure, without connected on-chain FX markets, we will have recreated the same fragmented, corridor-by-corridor problem that exists in traditional finance, just on a blockchain. The problem is not whether nTZS is good for Tanzania. The problem is whether nTZS can talk to nKES which can talk to nNGN seamlessly, and whether there is enough liquidity in each pair to make the exchange meaningful.
This is why the Stellar anchor and Path Payments matter so much to us. Stellar was designed for exactly this, multi-hop currency routing without USD as an intermediate step. TZS to KES directly, on-chain, in a single transaction. That is the infrastructure that turns a collection of isolated local stablecoins into a connected African financial network.
Public trust is the second concern. Mobile money in Tanzania succeeded because it was simple and because the mobile operators built agent networks that reached every corner of the country and explained the product face to face. We need to replicate that human layer for nTZS. The technology is not the hard part. Explaining to a market trader in Mbeya why a digital shilling on a blockchain is safer than cash, that is the hard part and it requires patience and physical presence.
Regulation is my least acute concern not because it is not real, but because I believe regulators in East Africa understand what is at stake. Tanzania’s BOT approval is evidence of that. The regulatory risk I would flag is inconsistency across jurisdictions, Tanzania’s approach may not be Kenya’s approach may not be Nigeria’s approach, and builders trying to operate pan-African infrastructure have to navigate all of them simultaneously.
TradFi to Onchain Transition
Blockwisely: What major mindset shifts are required when moving from traditional banking to building on-chain infrastructure in Africa?
Machuche: The biggest shift is moving from thinking about money as something that sits in accounts to thinking about money as something that flows through protocols. In traditional banking, your shilling sits in a Temenos core banking system at NBC Bank and moves when a human authorises a transfer during business hours. On-chain, your shilling is a token that can move in any direction, at any time, triggered by any condition that you encode in a smart contract. That is a completely different mental model and it changes how you design products.
The second shift is around trust architecture. In TradFi, trust is institutional. You trust the bank because the bank has a licence and a balance sheet and a regulator. On-chain, trust is mathematical, you trust the contract because the code is auditable and the blockchain is public. As a builder coming from a banking background, I had to learn to think about trust as something provable rather than assumed. The nTZS reserve ratio is published on-chain. Anyone can verify it at any time. That is a fundamentally different kind of transparency than a bank’s quarterly report.
The third shift is accepting that your infrastructure is your product. In banking, the infrastructure is invisible to the customer, they see the app. In DeFi and stablecoin infrastructure, the smart contract IS the product. Builders need to understand that deeply before they start.
Currency Integration
Blockwisely: How do you envision interoperability between different African local-currency stablecoins like nTZS, nKES, and nNGN?
Machuche: The vision I have is a connected network of sovereign-backed digital currencies, each issued under local central bank supervision, all interoperable through shared protocol layers. Think of it as the EAC monetary integration that economists have been talking about for decades, but built bottom-up through on-chain infrastructure rather than top-down through political negotiation.
The practical architecture is already being built. We have built a SimpleFX tool that routes multi-hop currency swaps atomically, meaning a payment can go from TZS to KES to UGX in a single transaction without the user ever touching an exchange. EAPS, the East African Payment System that connects Tanzania, Kenya, Uganda, and Rwanda’s central bank RTGS systems has existed since 2013 but operates only at the institutional level with $100,000 minimums. On-chain local currency stablecoins democratise what EAPS does at the retail level.
The interoperability problem is not technical, it is governance and liquidity. Who sets the parameters for a nTZS/nKES exchange? Where does the liquidity come from? How do you prevent manipulation in a thin pair? These are the problems that matter and they require coordination between issuers, not just protocol design.
My answer: build the national layers first to get each country’s stablecoin right, with proper central bank supervision and deep domestic liquidity, then connect them. Trying to build pan-African interoperability before any single country has a properly functioning local stablecoin is putting the infrastructure before the foundation.
Stablecoin Semantics
Blockwisely: If every African country launches its own stablecoin, doesn’t the term ‘stablecoin’ start to lose meaning? How should we redefine it?
Machuche:Yes, and it should. The word “stablecoin” was coined to describe something pegged to the US dollar that would not be volatile like Bitcoin. That definition made sense in 2018. In 2026, with dozens of currencies represented on-chain under central bank supervision, the term is increasingly inadequate.
What we are building with nTZS is better described as programmable sovereign currency, a digital representation of Tanzania’s shilling that carries all the properties of a TZS alongside programmability, yield, and global accessibility. The “stable” part is almost beside the point. Of course it is stable. It is backed by the shilling. The interesting properties are everything else.
I think the more meaningful taxonomy that emerges in a multi-currency on-chain world will be around two dimensions: how is the reserve managed, and what jurisdiction is it supervised under? A BOT-supervised, T-bill-backed TZS digital currency is a fundamentally different instrument from an algorithmic stablecoin or even a dollar-backed stablecoin issued by a private company. The category “stablecoin” does not capture that difference. We need better language and the builders who get to define that language will shape how regulators and institutions think about this asset class for the next decade.
How did you get into crypto
Blockwisely: What’s your personal story,how did you get into crypto and decide to build Neda labs?
Machuche: I spent years working inside Tanzania’s banking system, specifically in agency banking at KCB Bank, managing the networks of agents and PSPs that bring financial services to people who cannot easily access a branch. That experience taught me two things very clearly. First, Tanzania’s mobile money infrastructure is genuinely extraordinary — the pipes for digital money movement are already in place at massive scale. Second, those pipes were moving a shilling that could not do anything smart. It could move, and that was it. It could not earn yield while sitting idle. It could not trigger a payment automatically when a condition was met. It could not cross a border without going through a correspondent bank and losing 5 percent.
I started exploring blockchain not because I was interested in crypto as a speculative asset I genuinely was not, but because I saw it as the technology that could make the Tanzanian Shilling programmable. The question I kept coming back to was: what if mobile money was money that could think? What if the shilling in your wallet could earn the same yield that a bank earns on your deposits? What if paying a supplier in China was as simple as sending an M-Pesa to a friend?
Victor and I started building the answer to those questions. We called it NEDA Labs because it was meant to be a laboratory for Tanzania’s financial infrastructure, experimenting with what becomes possible when you combine mobile money scale with programmable currency. nTZS is the first experiment. NEDApay is the first application. But the vision was always bigger than one product, it was always about what East Africa’s financial infrastructure could look like if money itself was as sophisticated as the people using it.
The BOT sandbox approval in April was the moment that made it real. That is the moment Tanzania’s central bank said we believe this is worth testing. For anyone building in this space in Africa, I would say: the moment you get that kind of institutional acknowledgement, the work changes completely. It stops being an experiment and starts being infrastructure.
