The new digital currency introduced by the Bank of Ghana “will completely transform the architecture of our payment system and deepen financial inclusion, support inclusive and shared growth for our people”, President Nana Akufo-Addo has said.
Praising the central bank’s digitalisation efforts after swearing in its new board of directors on Friday, 20 August 2021 at the Jubilee House, the president said: “I’ve watched with keen interest, the Bank’s leading role in the digitalisation of the Ghanaian economy”, pointing to the recent announcement of the pilot central bank digital currency (e-cedi).
The central bank recently partnered with Giesecke+Devrient (G+D) to pilot a general-purpose Central Bank Digital Currency (retail CBDC) in Ghana.
G+D is providing the technology and developing the solution adapted to Ghana’s requirements, which will be tested in a trial phase with banks, payment service providers, merchants, consumers and other relevant stakeholders.
To this end, the Bank of Ghana has signed an agreement with G+D to implement a pilot CBDC project as a precursor to the issuance of a digital form of the national currency, the cedi.
The project is part of the ‘Digital Ghana Agenda’, which involves the digitisation of the country of 30 million people and its government services.
The digital cedi, or ‘e-cedi’, according to the central bank, is intended to complement and serve as a digital alternative to physical cash, thus, driving the Ghanaian cashlite agenda through the promotion of diverse digital payments while ensuring a secure and robust payment infrastructure in Ghana.
It also aims to facilitate payments without a bank account, contract, or smartphone, thus, boosting the use of digital services and financial inclusion amongst all demographic groups.
The project, according to the BoG, will be divided into three phases: design, implementation and pilot.
In the design phase, all framework parameters for the CBDC pilot will be specified and defined. These include economic, regulatory and technical requirements of the country as well as the definition of the parameters for the test phase.
In accordance with these individual requirements, G+D’s CBDC solution would be adapted for the Ghanaian context in the second phase.
In the pilot phase, a user group of diverse demographic and socio-economic backgrounds will test the solution in the field using different channels and form factors such as mobile apps and smart cards. Over the course of the pilot project, a study will be conducted on the acceptance of the e-Cedi from the end users’ perspective.
In addition, the IT security of the infrastructure, impact of the project on monetary policy and payment system, and the legal implications will be evaluated. Insights from pilot user experiences would then provide Bank of Ghana and G+D with valuable lessons for a nationwide rollout of the e-Cedi.
Dr. Ernest K. Y. Addison, Governor of the Bank of Ghana, stated: “CBDC presents a great opportunity to build a robust, inclusive, competitive and sustainable financial sector, led by the Central Bank. From all indications, the concept has a significant role to play in the future of financial service delivery globally. This project is a significant step towards positioning Ghana to take full advantage of this emerging concept.”
“Central banks around the world are exploring the introduction of digital money as legal tender. The Ghanaian government is one of the first African countries now entering a pilot phase. We are proud to support Ghana with our technology and expertise,” Dr Wolfram Seidemann, CEO of the Giesecke+Devrient Currency Technology business sector stated for his part.
The introduction of the e-cedi together with other measures taken by the central bank, such as its initiatives “to enhance access to credit by small- and medium-scale enterprises (SMEs)”, according to President Akufo-Addo, has earned the Bank of Ghana well-deserved accolades.
“I’ve always held the view that wide access to credit by SMEs can promote shared growth and better income distribution and I commend the Bank for its most recent initiative and partnership with the Monetary Authority of Singapore and the Ministry of Finance to develop a network of digital platforms to serve as global public infrastructure to boost the growth of SMEs in the two countries”.
“All of these, have established the Bank of Ghana as an institution of excellence, reflected in the recent international recognitions of the Bank”, President Akufo-Addo, said, adding: “For a second successive year, the Bank of Ghana has won the central bank of the year award”.
“This, is in addition to the brilliant Governor of the Bank of Ghana, Dr Ernest Addison, being named central bank governor of the year for Sub-Sahara Africa”, the president praised.