Zanzibar has officially launched its National Blockchain Sandbox, aiming to nurture tech innovation and position the semi-autonomous region as a key player in the global blockchain ecosystem. According to a local press report, the initiative will allow tech startups to test their blockchain solutions within a controlled environment on the National Blockchain Network, with a particular focus on projects that promote financial inclusion, identity verification, and certification issuance.

The sandbox is designed to help developers experiment with emerging technologies under relaxed regulatory conditions, offering a pathway for innovative startups to bring blockchain applications to market. This initiative marks a significant step forward in Zanzibar’s efforts to embrace digital transformation and attract investment in its growing tech sector.

Supporting Tech Innovation and Entrepreneurship

Startups that gain admission to the sandbox will also have access to government-sponsored training programs and incubators designed to help them scale their projects. The Director General of Zanzibar’s e-Government Authority, Said Seif Said, emphasized the importance of mentorship and collaboration for young innovators.

“Innovators will have opportunities to work on pilot projects, collaborate with experts, and receive mentorship from industry leaders, which is crucial for the success of emerging technologies,” Said noted.

The sandbox, developed by Dubai-based LedgerFi IT solutions, will operate on the EVM-compatible Xinfin XDC layer-1 network, providing startups with a robust infrastructure for developing blockchain solutions. This initiative comes as part of Zanzibar’s broader digital agenda, which seeks to position the region as a hub for cutting-edge technologies like blockchain and artificial intelligence.

A Growing Blockchain Landscape in Tanzania

Zanzibar’s blockchain sandbox follows the broader national trend, with the Bank of Tanzania (BOT) having introduced a legal framework for fintech sandboxes earlier this year. The framework, rolled out after a year of preparations, outlines eligibility requirements, application procedures, and a nine-month testing period for fintech projects across the country.

Tanzania is witnessing significant growth in digital finance. In 2023, an estimated 72% of the adult population used mobile money services, far outpacing the 22% who relied on traditional banks. Despite government warnings against cryptocurrency use in 2019, recent reports indicate a rising interest in digital assets, with 1.7% of Tanzanian adults having invested in cryptocurrencies by 2023.

In line with this trend, the Zanzibar government is pushing forward with its own blockchain initiatives. In 2021, the region reportedly considered adopting cryptocurrency independently of the Tanzanian national government after President Samia Suluhu Hassan expressed support for exploring digital currencies.

Opportunities for Blockchain Entrepreneurs

Zanzibar’s National Blockchain Sandbox is expected to attract tech entrepreneurs from across the region, providing a safe space for startups to experiment and grow. Startups focused on financial inclusion, identity verification, and certification issuance will be given priority for admission, according to the Kenyan Wall Street report.

Participants in the sandbox will have the added benefit of working closely with industry experts and mentors. High-performing projects may also receive technical training and join incubator programs aimed at enhancing their capabilities and improving their market readiness.

“Our primary goal is to create a supportive environment for the development of cutting-edge technologies, including blockchain, AI, and other emerging fields,” said Seif.

As Zanzibar continues to roll out its blockchain initiatives, the region is positioning itself as a key player in Africa’s digital transformation, helping drive innovation and economic growth through tech entrepreneurship.