The Central Bank of Tanzania announced that it is still debating whether to establish a central bank digital currency (CBDC), but that it will pursue a "phased, cautious, and risk-based approach to the adoption of CBDC" after finding a number of obstacles that may hinder its implementation.
The bank did not provide a specific deadline for when it would decide whether to approve Tanzania's CBDC, but it did state that it would "continue to monitor, research, and collaborate with stakeholders, including other central banks, in the efforts to arrive at a suitable and appropriate use and technology for issuance of Tanzanian shillings in digital form."
The bank disclosed that its staff has studied several CBDC kinds, issuance, and administration models, as well as whether or not they are token-based or account-based. The bank said.
“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. Analysis of these findings indicate that 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 least four nations—Denmark, Japan, Ecuador, and Finland—have publicly abandoned their plans to adopt CBDCs, and six more have done so due to structural and technical difficulties in the implementation stage, including high implementation costs, the dominance of cash, ineffective payment systems, and the potential for ecosystem disruption.