Tanzania’s central bank is taking a careful and methodical approach to explore the potential risks and benefits of introducing a Central Bank Digital Currency (CBDC).
A multidisciplinary technical team has been formed to conduct research and evaluate the different types of CBDCs and discuss the technology and issuance models.
The Bank of Tanzania has seen that over 100 countries are at different stages in the CBDC adoption journey.
Denmark, Japan, Ecuador, and Finland have announced that they have canceled plans for a CBDC, while six more countries have moved away from digital currencies due to the high implementation costs, the dominance of cash, and inefficient payment systems.
The Bank of Tanzania is looking into the risks and controls associated with the issuance, distribution, counterfeiting, and usage of currencies.
The central bank has taken a cautionary approach to ensure that the implementation of a CBDC would not disrupt the financial stability of the country.
At this point, the Bank of Tanzania has not given a timeline for when it will make a decision on a CBDC, but it is continuing to research and collaborate with stakeholders.
Governor Florens Luoga made an announcement in November 2021 to expand research into digital currencies and strengthen the capacity of central bank officials.