“CBDC The Right Transition” On January 14th, the Bank of Tanzania publicized that they had “adopted a phased, cautious and risk-based approach to the adoption of CBDC.” They detailed that their efforts to find “a suitable and appropriate use and technology for issuance of Tanzania shillings in digital form” will continue.
On the bank’s website, they stated they are choosing a more thoughtful approach to issuing digital currency after examining the pros and cons. The BOT reported that during this time, it noticed that other central banks had adopted the same stance. Six countries stepped down from their CBDC adoption. The BOT said this is “mainly due to structural and technological challenges in the implementation phase.”
On May 2022, Bitcoin.com News reported that the Tanzanian central bank also planned to launch CBDC. As this was an ongoing trend among central banks recently. The bank added that digital currency is “a safer alternative because many people are being affected by cryptocurrency speculators.”
The BOT had indicated its readiness to begin in the first half of 2022, but concerns that the CBDC may disrupt the nation’s financial system ultimately compelled it to take a more cautious approach.
CBDC Risks
During this research phase, the central bank of Tanzanian said it considered various types of CBDC that could be issued. For example, the models for issuance and the type of digital currency. As well as the “degree of anonymity or traceability.” They went on, “particular attention also is paid to risks and controls associated with issuance, distribution, counterfeit and usage of currencies.”
The BOT mentioned that the plan for the “transition to CBDC adoption” will take time. Concluding that it would be provided to the Tanzanian public after the research has ended.