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Tanzanian Central Bank Adopts ‘Phased and Risk-Based Approach to Adoption of CBDC’

News Feed - 2023-01-17 04:01:28

Tanzanian Central Bank Adopts "Phased and Risk-Based Approach to Adoption of CBDC"


After months of research, the Tanzanian central bank announced recently that it had chosen a more cautious and risk-based approach towards the adoption of its central bank digital currency (CBDC). During the research phase, the central bank said it paid particular attention “to risks and controls associated with issuance, distribution, counterfeit and usage of currencies.” Finding the Right CBDC Technology


The Bank of Tanzania (BOT) announced on Jan. 14 that it had “adopted a phased, cautious and risk-based approach to adoption of CBDC [central bank digital currency].” The bank also said it will continue with its efforts aimed at finding “a suitable and appropriate use and technology for issuance of Tanzanian shillings in digital form.”


According to a statement on the bank’s website, the BOT said it chose a more cautious approach after spending months researching and exploring the pros and cons of issuing the digital currency. During this period, the BOT said it found that other central banks had adopted the same posture, while six countries had chosen to cancel their CBDC adoption “mainly due to structural and technological challenges in the implementation phase.”


As reported by Bitcoin.com News in May 2022, the Tanzanian central bank said it planned to launch its CBDC because this had become a trend among central banks. In addition, the bank said the digital currency would be “a safe[r] alternative because many people are being affected by cryptocurrency speculators.”


However, fears the CBDC could disrupt the country’s financial system eventually forced the BOT, which signaled its readiness to launch in the first half of 2022, to adopt a more conservative approach.


Risks Associated With CBDCs


Meanwhile, during the research phase, the Tanzanian central bank revealed that it considered the type of CBDC to be issued, the models for issuance, the form of the digital currency, as well as the “degree of anonymity or traceability.” The statement also suggested the bank had given more attention to associated risks.


“Particular attention also is paid to risks and controls associated with issuance, distribution, counterfeit and usage of currencies,” the central bank said.


In the statement, the BOT said once the research is complete, the Tanzanian public will be given information on the way forward and this will likely include a roadmap for the “transition to CBDC adoption.”


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Tags in this story Bank of Tanzania, CBDC, CBDC adoption, CBDC anonymity, central bank digital currency, Cryptocurrency, Tanzanian shillings


What are your thoughts on this story? Let us know what you think in the comments section below. Terence Zimwara


Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route. Report: Egyptian Pound Reaches New Low Against US Dollar Despite Flexible Exchange Rate Regime AFRICA | 1 day ago New Nigerian Central Bank Document Discusses Regulation of Stablecoins and ICOs AFRICA | Jan 10, 2023


Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleGeorgia Prepares to Launch Digital Lari Pilot in First Half of 2023 Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItFollowing a Brief Fee Spike, Gas Prices to Move Ethereum Drop 76% in 12 Days


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