Tanzania has put in place plans to adopt the Central Bank Digital Currency (CBDC) as most countries are pushing to adopt cryptocurrencies.
Professor Florens Luoga, the Bank of Tanzania (BoT) Governor said Tanzania intends to go crypto in the coming days.
“To ensure that our country is not left behind the adoption of central bank digital currencies, the Bank of Tanzania has already begun preparations to have its own CBDC,” said Luoga on November 25 during a two-day Conference of Financial Institutions in the country.
Luoga said the regulator is still on a research path on cryptocurrencies and would issue regulations once the research is complete. The Central Bank Digital Currency (CBDC) in November 2019 warned the public to be cautious when trading in cryptocurrencies saying they are not authorized in the country.
Several other countries have already taken concrete steps or announced their intentions to launch a CBDC in the future.
The Bahamas became the first country in the world to publicly avail its own central bank digital currency (CBDC) in October 2020, while Nigeria was first in Africa on October 26 this year.
On June 23 this year, the Bank for International Settlements (BIS) gave its full backing to the development of CBDCs, to ensure ‘Big Tech’ do not take control of money.
Demands on retail payments are changing, with fewer cash transactions and a shift towards digital payments, in particular since the start of the COVID-19 pandemic.
According to BIS, the ultimate benefits of adopting a new payment technology will depend on the competitive structure of the underlying payment system and data governance arrangements.
“The same technology that can encourage a virtuous circle of greater access, lower costs and better services might equally induce a vicious circle of data silos, market power and anti-competitive practices. CBDCs and open platforms are the most conducive to a virtuous circle.”
The push comes as physical cash use falls globally and authorities look to fend off the threat to their money-printing powers from bitcoin and efforts from ‘Big Tech’ such as the Facebook-backed Diem, formerly Libra.
The BIS acknowledged that the technology could encourage either a virtuous circle of equal access, greater competition and innovation, or it could foment a vicious circle of entrenched market power and data concentration.
