Ghana is preparing to launch its central bank digital currency (CBDC), the e-Cedi, later this year, after years of delays.
The Bank of Ghana (BoG) has been developing the digital currency for over five years but has fallen behind neighbors like Nigeria, which introduced the eNaira three years ago.
Why it matters
- The e-Cedi aims to provide offline functionality, making digital payments accessible to unbanked populations in rural areas.
- BoG has worked with Germany’s Giesecke+Devrient (G+D) to test the e-Cedi, leveraging technology also used in Singapore, Thailand, and Brazil.
- Whether the CBDC officially launches will depend on lawmakers passing legislation to legalize digital currency.
What they’re saying
“We wanted to create an instrument that allows people to live off-grid and use it as they would use cash,” — Kwame Oppong, BoG’s Head of Fintech and Innovation
By the numbers
- 72% of central banks expect to issue a digital currency.
- 48% plan to do so within the next five years, according to a G+D report.
- Ghana’s mobile penetration is over 100%, but internet penetration is only around 70%, making offline payments a key feature.
The big picture
- BoG will not use decentralized ledger technology (DLT) for the e-Cedi, at least in its initial phase, opting for a centralized model instead.
- Some central banks have abandoned CBDC plans, arguing that instant payment systems (IPS) are sufficient. But BoG sees CBDCs as the future of digital payments.
- Meanwhile, the Bank for International Settlements (BIS) argues that CBDCs could eventually make stablecoins obsolete, questioning their long-term viability.
Source: Coingeek
