The central bank of Tanzania has stated that it is still debating whether to implement a central bank digital currency (CBDC), but that it will proceed with a “phased, cautious, and risk-based approach” after identifying a number of obstacles that might hinder its implementation, as reported by Cointelegraph.
According to Cointelegraph, in response to its 2021 announcement regarding a potential CBDC rollout, The Bank of Tanzania reportedly established a multidisciplinary technical team to investigate the advantages and disadvantages of CBDCs.
The bank disclosed that its team has investigated various CBDC types, models for issuance and management, and whether its CBDC should be account-based or token-based.
At least four nations—Denmark, Japan, Ecuador, and Finland—have publicly abandoned their plans to adopt CBDCs, and another six have abandoned their plans because of implementation-related structural and technological difficulties, Cointelegraph further noted.
High implementation costs, the prevalence of cash, ineffective payment systems, and the potential for ecosystem disruption were some of the difficulties, according to the bank.
(With insights from Cointelegraph)