Tanzania’s central bank refuses to rush to issue its own digital currency

The Central Bank of Tanzania has formed a working group to study the risks and announced a low-key policy regarding the implementation of CBDC. The group conducted a study of various implementation options, methods of issuing and managing the state digital currency, and the Central Bank decided not to rush. “Analysis of our observations shows that the majority of central bankers around the world are taking a cautious approach to the CBDC implementation roadmap in order to avoid any potential risks that could disrupt the financial stability of the economy,” the Central Bank of Tanzania said in a statement. Based on research, the country's financial regulator said that no final decision had been made on the deployment of a central bank digital currency (CBDC) in the country, and the bank would take a “phased, cautious and risk-based approach.” The regulator believes that the dominance of cash, inefficient payment systems, high implementation costs, and the possibility of disrupting the existing financial ecosystem are just some of the challenges central banks face in implementing CBDCs. Earlier, four countries at once – Denmark, Japan, Ecuador and Finland – abandoned plans to introduce a state digital currency, citing insurmountable structural and technological difficulties that arise during the project implementation stage.