Validation of a secure retail Central Bank digital currency prototype: a case study of Tanzania

Central bank digital currencies (CBDCs) are increasingly viewed as instruments for reducing transaction costs, improving payment efficiency and financial inclusion. Nevertheless, concerns regarding security and contextual suitability remain significant in developing countries. This study aimed to validate a secure two-tier account-based retail CBDC prototype developed for the Tanzanian context. Guided by a design science research approach and the Framework for Evaluation in Design Science, the study employed a two-layer evaluation strategy. The first layer involved requirements-based testing, while the second layer comprised a remote expert evaluation, where quantitative and qualitative expert feedback were analyzed using statistical and thematic analyses, respectively. The results indicated that the prototype largely met its defined requirements. The expert assessments demonstrated statistically significant positive perceptions regarding the adequacy of security mechanisms, correctness of core CBDC processes, practicality of the proposed architecture, and the artefact’s overall research contribution. The qualitative insights highlighted strengths in privacy-preserving design and institutional responsibility separation, while identifying needs for stronger cryptographic assurance, interoperability, pilot validation, enhanced privacy and post-quantum mechanisms, offline functionality, and scalability and resilience testing. Overall, the study provides empirical support for the feasibility of a secure, contextually relevant retail CBDC prototype for Tanzania at the research level.