The Bank of Tanzania (BOT) declared that it had opted to adopt central bank digital currency in a staged, cautious, and risk-based manner. The bank added that it will keep working to identify a use and technology that would be fit and suitable for issuing digital Tanzanian shillings.
The BOT stated that after months of investigation and consideration of the advantages and disadvantages that the launch of digital currency brings, it decided to take a more cautious approach.
The bank added that during this time, it discovered that other central banks had taken the same approach, while six nations had chosen to withdraw their implementation of the CBDC, primarily because of structural and technological difficulties during the implementation phase.
The Tanzanian central bank announced its plan to develop its CBDC back in May 2022 since other central banks were doing the same. The bank added that given how many individuals are impacted by cryptocurrency speculators, digital currency would be a safer choice.
The BOT had indicated its readiness to begin in the first half of 2022; but, worries that the CBDC may destabilize the nation’s financial system ultimately compelled it to take a more cautious tack.
The Tanzanian central bank disclosed that during the research phase, it took into account the “degree of anonymity or traceability,” the models for issuance, the form of the digital currency, and other factors. The statement implied that the bank had given associated risks more thought as well.
In the statement, the BOT noted that the Tanzanian public would be informed about the next steps after the research is finished, which would probably include a roadmap for the adoption of CBDC.
