By Business Insider Reporter & Agencies
The Bank of Tanzania (BoT) is set to release a comprehensive study on Central Bank Digital Currencies (CBDCs), examining their potential impact on the country’s financial ecosystem, payment systems, and the practicality of adoption by citizens given the existing infrastructure.
According to BoT’s Director of Financial Deepening and Inclusion, Kennedy Komba, the upcoming report will outline both the benefits and risks of introducing a digital shilling and guide the development of a national roadmap for CBDC implementation.
“Unlike crypto currencies such as Bitcoin, CBDCs are a digital representation of a country’s currency, government-backed and centrally issued,” Komba clarified.
He added that while crypto currencies are privately issued and treated as assets, CBDCs function as a digital version of fiat currency.
He did not mention the exact date but said that the study will come out soon.
BoT began exploring CBDCs in January 2023 through a phased, risk-based approach, signaling a cautious yet forward-looking stance on digital monetary policy.
However, BoT Governor, Emmanuel Tutuba, was recently quoted as saying that an earlier internal study from 2021 will analyse experiences from other countries to assess real-world opportunities and obstacles.
Upon assuming office, President Samia Suluhu Hassan directed the Bank of Tanzania to explore the introduction of digital currencies as part of efforts to modernise the national economy and align with global financial innovations.
Her directive reflects a growing recognition of the potential of central bank digital currencies and other forms of digital money to promote financial inclusion, enhance transaction efficiency, and support the country’s digital transformation agenda.
Digital currencies – whether state-backed like CBDCs or private-sector driven such as mobile money tokens – are increasingly being explored across Africa. Countries like Nigeria have already launched a CBDC, the eNaira, while others such as Ghana and South Africa are conducting pilot projects.
These initiatives aim to provide secure, cost-effective alternatives to cash, reduce transaction friction, and improve the reach of financial services in underserved areas.
However, the adoption of digital currencies also presents challenges.
These include concerns around cyber security, privacy, digital literacy, and the risk of excluding populations without access to digital infrastructure. Moreover, the shift to digital money could disrupt traditional banking models if not managed carefully.
As Tanzania weighs its options, the President’s forward-looking directive sets the stage for a strategic and inclusive approach—one that balances innovation with safeguards to ensure the benefits of digital finance are accessible to all.
Tanzania maintains a de facto ban on crypto currencies, with the Tanzanian Shilling remaining the only legal tender.
A different report urged EAC member states to evaluate crypto platforms, analyse market activity and adopt clear regulations to curb fraud, tax evasion and disruption to formal financial systems.
Kenya and Tanzania reportedly lead in the region’s crypto adoption, though official data is lacking.
It also highlighted the potential for crypto currencies and blockchain to drive financial inclusion, job creation, and innovation in sectors such as health, education, and governance.
For instance, Kenya utilised blockchain technology to improve electoral transparency in its 2022 general elections. The report recommended that EAC countries collaborate with global institutions like the International Monetary Fund (IMF) to enhance digital finance frameworks and infrastructure.
