In January 2023, the Bank of Tanzania issued a public notice detailing its current research stage focused on Central Bank Digital Currency (CBDC). To facilitate this research, the bank established a multidisciplinary technical team responsible for examining practical aspects of CBDC and enhancing the team’s expertise through various means. Additionally, the Bank of Tanzania organized the 20th Conference of Financial Institutions in Tanzania in 2021, centering on the theme of CBDC and crypto assets, to enhance understanding in this field. The bank also engaged with local stakeholders through organized sessions to gather their perspectives on the matter.
Furthermore, the Bank of Tanzania actively participated in numerous international platforms such as the Committee of Central Bank Governors of the SADC Secretariat, Monetary Affairs Committee of the EAC Secretariat, IMF AFRITAC, and Association of African Central Banks. It also conducted several sessions with international private firms that specialize in providing technical infrastructure and solutions related to CBDC.
During this research stage, significant considerations revolve around selecting an appropriate approach to CBDC adoption based on Tanzania’s unique context. This encompasses decisions about the type of CBDC to be introduced (wholesale, retail, or a combination), models for issuance and management (direct, indirect, or hybrid), the format of CBDC (token-based or account-based), remuneration strategies, and the level of anonymity or traceability. Additionally, meticulous attention is dedicated to understanding and managing risks associated with issuance, distribution, counterfeit prevention, and currency utilization.
The Bank of Tanzania has embraced a phased, cautious, and risk-based strategy for CBDC adoption. It remains committed to ongoing monitoring, research, and collaboration with various stakeholders, including other central banks, as it seeks to identify suitable and appropriate uses and technologies for digitizing the Tanzanian shilling. Once the research phase concludes, the bank plans to disseminate information to the general public outlining the future course of action, which might include a roadmap for transitioning toward CBDC adoption.
Source:
https://www.bot.go.tz/Adverts/PressRelease/en/2023011413181519.pdf