In recent years, Tunisia—the North African country that launched the Arab Spring—has faced steep economic, financial and governmental challenges, which have been aggravated by the COVID-19 pandemic. The economy nosedived by 8.8% in 2020, poverty and vulnerability worsened, and unemployment rose to 17.8% by the first quarter of 2021.1 The International Monetary Fund predicts a 2021 growth rate of 3.8%,2 but poverty and vulnerability will continue to deepen.3 Meanwhile, ongoing political unrest has lent further uncertainty to Tunisia’s future. Thousands of people continue to flock to the streets in protest against—or in support of—President Kais Saied’s seizure of power in July.4
Tunisia must harness digital transformation in addressing its economic and financial challenges, spearheading recovery and making progress towards sustainable development goals. The government’s most ambitious strategy of the past few years has been Digital Tunisia 2020, which included 64 projects towards expanding digital infrastructure, promoting online payment systems and more.5 One of the strategy’s highlights, Startup Tunisia, encompassed multiple initiatives to foster entrepreneurship and innovation. The Startup Act, passed in 2018, aims to simplify the launching of startups and provide them financial support,6 and the central bank launched a fintech regulatory sandbox in 2020. Still, barriers to the development of fintech persist, and Tunisia must make reforms in order to fully develop a competitive, digital economy. Tunisian fintechs report that complex bureaucratic administrative processes, an unfriendly regulatory framework and a lack of partnerships with financial institutions are impeding the development of fintech in the country.7 The state ranks #78 of 90 economies for digital evolution momentum on the Digital Intelligence Index (DII), developed by Mastercard and Tufts University’s Fletcher School.
This year, the Digital Strategy 2025, which replaces Digital Tunisia 2020, was introduced. The strategy outlines ambitious goals towards encouraging digital transformation, but it remains to be seen whether it will be fully and successfully implemented. The central bank, in partnership with the French central bank, successfully conducted an experiment on the use of central bank digital currency (CBDC) in cross-border wire transfers. Going forward, a key challenge will be ensuring that digitalization promotes financial inclusion, and does not widen the digital gap. A mere 36.9% of Tunisian adults have a bank account,8 and improvements to national digital infrastructure would be instrumental in helping them to access online banking and fintech services. A digital identity could encourage financial inclusion, but it must be accompanied by stronger data protection and cybersecurity standards. In March, the Ministry of Interior again proposed a biometric national ID and a biometric passport, but civil society strongly opposed the draft bill due to data protection and privacy concerns.9
Financial Regulatory Authorities
The Central Bank of Tunisia is Tunisia’s central bank.
The National Authority for Protection of Personal Data (the Instance) is Tunisia’s data protection agency.
Policy, Laws and Regulations
Cross-Border CBDC Experiment, 08 July 2021
The Tunisian and French central banks successfully completed a joint CBDC experiment, which conducted wire transfers between French and Tunisian commercial banks utilizing a blockchain-based wholesale CBDC.10 The solution would be invaluable in making remittances faster and cheaper. Director General of the Development and Supervision of Payment Systems and Means at the central bank, Mohamed Sadraoui, said, “This platform will likely reinforce transparency, speed and cost savings, all of which are conducive to a better inclusion of the Tunisian diaspora in Europe. The success of this experiment is an opportunity to start thinking about the deployment of alternative channels for cross-border transfers initiated by the Tunisian community in Europe to Tunisia.”11 In 2020, Tunisia received approximately USD$2.1 billion in remittances,12 about 5.35% of its GDP.13
Digital Strategy 2025, 06 February 2021
The Tunisia Digital 2021-2025 strategy outlines six guidelines that aim to drive digital transformation, develop the national fintech ecosystem, promote financial inclusion and attract foreign investment. Key goals include bolstering digital literacy, developing e-payment services, expanding internet access, digitalizing government services, boosting data protection and establishing a cybersecurity policy.14 The Global Cybersecurity Index (GCI) 2020, developed by the United Nations’ International Telecommunication Union (ITU), ranks Tunisia #45 in the world—out of 194 states—for cybersecurity.
1. “The World Bank in Tunisia.” The World Bank, 21 June 2021. https://www.worldbank.org/en/country/tunisia/overview#1.
2. “Tunisia.” International Monetary Fund. https://www.imf.org/en/Countries/TUN.
3. “The World Bank in Tunisia.” The World Bank, 21 June 2021. https://www.worldbank.org/en/country/tunisia/overview#1.
4. Amara, Tarek. “Thousands protest against Tunisia leader with government awaited.” Reuters, 10 October 2021. https://www.reuters.com/world/africa/thousands-protest-against-tunisia-leader-with-government-awaited-2021-10-10/.
5. “The Tunisian Startup Act.” The Carnegie Endowment for International Peace, 26 June 2018. https://carnegieendowment.org/sada/76685.
6. Hinrichsen, Simone. “Exploring the Rising Tunisian Start-up Ecosystem.” GSMA, 02 November 2020. https://www.gsma.com/mobilefordevelopment/blog/exploring-the-rising-tunisian-start-up-ecosystem/.
7. Amara, Ismail. “Fintech, a new horizon.” TIMUN, 05 May 2021. https://timun.tn/2021/03/05/fintech-a-new-horizon/.
8. “The World’s Unbanked Population.” Acuant, 25 November 2020. https://www.acuant.com/blog/the-worlds-unbanked-population/.
9. “Statement: Tunisia’s newly proposed biometric ID and e-passport threaten privacy.” Access Now, 09 March 2021. https://www.accessnow.org/tunisia-biometric-id-passport-threaten-privacy/.
10. “Central banks of France, Tunisia in wholesale cross border CBDC trial.” Ledger Insights, 19 July 2021. https://www.ledgerinsights.com/central-bank-of-france-tunisia-in-wholesale-cross-border-cbdc-trial/.
11. “Central Bank of Tunisia tests CBDC pilot with Central Bank of France.” Unlock, 14 July 2021. https://www.unlock-bc.com/news/2021-07-14/central-bank-of-tunisia-tests-cbdc-pilot-with-central-bank-of-france/.
12. “Personal remittances, received (current US$).” The World Bank. https://data.worldbank.org/indicator/BX.TRF.PWKR.CD.DT?locations=TN.
13. “Personal remittances, received (% of GDP) – Tunisia.” The World Bank. https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?locations=TN.
14. “National strategic plan 'Tunisia Digital 2021-2025,' being finalised (official).” Tunis Daily News, 01 April 2021. http://www.tdailynews.net/storyad-z12562030.
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Last updated: November 2021