Tanzanian Central Bank Adopts ‘Phased and Risk-Based Approach to Adoption of CBDC’ – Africa Bitcoin News
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After months of research, the Central Bank of Tanzania recently announced that it has taken a more cautious and risk-based approach to the introduction of a central bank digital currency (CBDC). The central bank said during the research phase that it pays special attention to “risks and supervision related to the issuance, distribution, counterfeiting and use of currencies”.
Finding the right CBDC technology
On January 14, the Bank of Tanzania (BOT) announced that it had “adopted a phased, cautious and risk-based approach to the introduction of CBDC [central bank digital currency].” The bank also said it will continue its efforts to find “an appropriate and appropriate usage and technology for issuing Tanzanian shillings in digital form”.
According to a statement on the bank’s website, the BOT said it took a more cautious approach after spending months studying the pros and cons of issuing digital currency. During this time, the BOT said it found that other central banks had adopted the same stance, while six countries had decided to withdraw the introduction of CBDCs “mainly due to structural and technical challenges in the implementation phase”.
As Bitcoin.com News reported in May 2022, the Central Bank of Tanzania announced plans to launch a CBDC as it had become a trend among central banks. In addition, the bank said the digital currency would be “secure”.[r] option because many people are affected by cryptocurrency speculators.”
However, fears that the CBDC could disrupt the country’s financial system eventually forced the BOT, which said it was ready to start operations in the first half of 2022, to take a more conservative approach.
Risks associated with CBDC
Meanwhile, the Central Bank of Tanzania revealed during the research phase that it took into account the type of CBDC to be issued, the issuance models, the format of the digital currency and the “degree of anonymity or traceability”. The statement also stated that the bank had paid more attention to the related risks.
“Special attention is also paid to risks and supervision related to the issuance, distribution, counterfeiting and use of currencies,” the central bank said.
In a statement, the BOT said that once the study is completed, the Tanzanian public will be informed of the progress, and this is likely to include a roadmap for “transition to CBDC implementation”.
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