- The East African government has reportedly organized a multidisciplinary technical team.
- At least four nations have openly scrapped CBDC adoption plans.
The Tanzanian central bank is still thinking about introducing a central bank digital currency (CBDC), but they claim they would do it in a “phased, cautious, and risk-based approach” due to the many potential obstacles in the way.
The Central Bank stated:
“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.”
Structural and Technical Obstacles
Since its 2021 statement about a prospective CBDC deployment, the East African government has reportedly organized a multidisciplinary technical team to investigate the potential dangers and advantages of CBDCs, as stated in a public notice published by The Bank of Tanzania on January 14.
The bank said that its team has investigated several CBDCs, their issuance, and administration strategies, and whether or not their CBDCs should be token-based or account-based.
A total of 103 nations are in various CBDC adoption phases, with 88 in the research phase, 20 in the proof of concept phase, 13 in the pilot phase, and 3 in the launch phase, according to the bank’s findings.
At least four nations have openly scrapped CBDC adoption plans, including Denmark, Japan, Ecuador, and Finland, while another six have moved away from digital currencies owing to structural and technical obstacles in the implementation phase, as indicated by the central bank.
The bank listed high implementation costs, reliance on cash, ineffective payment systems, and the potential for ecosystem disruption as some of these obstacles. The team is also examining the dangers and safeguards around the production, circulation, forgery, and use of currencies.