The Tanzanian central bank recently declared that, following months of investigation, it had decided to take a more cautious and risk-based approach to the introduction of its central bank digital currency (CBDC).
The central bank claimed that throughout the study stage, special focus was given to “risks and controls related with issuance, distribution, counterfeit, and usage of currency.”
A progressive, cautious, and risk-based approach to the implementation of CBDC (the central bank digital currency) was taken, according to a statement released by the Bank of Tanzania (BOT) on January 14. In addition, the bank stated that it would keep working to identify “a viable and appropriate usage and technology for issue of Tanzanian shillings in digital form.”
In a statement posted on the bank’s website, the BOT claimed that after months of investigation and consideration of the advantages and disadvantages of releasing the digital currency, it decided to take a more cautious approach.
The BOT claimed that during this time, it discovered that other central banks had taken the same stance, while six nations had decided to abandon their acceptance of the CBDC, primarily because of structural and technological difficulties during the implementation phase.
The Tanzanian central bank disclosed that during the study 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 declaration also implied that the bank had paid closer attention to such concerns.
The central bank stated that “particular attention is also made to risks and controls related with the issuance, distribution, counterfeit, and use of currencies.”
The BOT stated in the statement that after the study is over, the Tanzanian public will be informed on the next steps, which will probably include a timeline for the “transition to CBDC adoption.