Bank of Tanzania is treading cautiously on its way to launching CBDC

  • The Bank of Tanzania published a report regarding the launch of its CBDC. 
  • Four countries have publicly announced the cancellation of their CBDC adoption. 
  • As of October last year, CBDC has done transactions worth $18.3 Million.

The Bank of Tanzania is carefully preparing a Central Bank Digital Currency. The Bank has still not decided on whether to adopt CBDC.

The governor of the Bank of Tanzania said that Tanzania was planning to set up its own CBDC, as reported by Bloomberg on November 26, 2021. But for now, the Bank of Tanzania awaits the conclusion of its research into central bank digital currencies before reaching a final decision on adoption.

On January 14, the Bank of Tanzania publicized a notice that their team had researched various types of CBDCs models for allocation and handling, and whether a CBDC should be token-based or account-based. 

The Bank disclosed the result of its team research. “The outcome of the research at this point revealed that more than 100 countries in the world are at different stages of the CBDC adoption journey with 88 at research, 20 proof of concept, 13 pilot and 3 at launch,” as per the Bank notice.  

The Bank also noticed that “6 countries have canceled their CBDC adoption mainly due to structural and technological challenges in the implementation phase.” Meanwhile, four countries have reportedly announced the cancellation of their CBDC adoption plans, including Japan, Denmark, Finland and Ecuador. 

A key area being looked at by the team is also the risks and controls associated with currency issuance, distribution, counterfeiting and use. The Bank also added, “Analysis of these findings indicate that the majority of central bankers across the world have taken a cautionary approach in the CBDC implementation roadmap, in order to avoid any potential risks that can disrupt financial stability of their economies.”

At this stage, the Bank has not decided when CBDC will be adopted in Tanzania. Meanwhile, the Bank mentioned that “ The Bank of Tanzania will continue to monitor, research and collaborate with stakeholders.”

Reportedly, as of October last year, 1 million people downloaded the digital wallet linked to the CBDC, making nearly 700,000 transactions worth $18.3 million.