Is Ghana currency going digital?

Highlights

• Ghana Government announced digitisation as its key objective
• Numerous programs have been proposed including introduction of a government-backed digital currency.
• The Ghana digital currency will not be a cryptocurrency.

Ghana is entering into a new financial era as the Government announced digitisation as its key objective. Numerous programs have been proposed as a part of the objective, and one of the most fascinating proposals is the introduction of Africa’s first government-backed digital currency.

What is Ghana digital currency?

Ghana digital currency is a digital currency which is different from cryptocurrencies. The proposed digital currency is called e-Cedi. The aim of introducing e-Cedi is to establish a digital payment alternative to the physical cash.

The E-Cedi project fulfils the cashlite agenda of the Ghanian Government. It will diversify the digital payment along with extending a robust payment infrastructure and ensuring the security of the funds. Moreover, this payment mechanism will be capable of transferring funds even without a bank account, smartphones and contracts. This will boost financial inclusion as digital services will be made available to all demographic groups.

Image source: © Snyderdf | Megapixl.com

Where does the e-cedi project stand?

The Bank of Ghana has entered into a contract with the security technology provider, Giesecke + Devrient (G+D), to conduct the pilot test of the Central Bank Digital Currency (CBDC).  Before making it available for the local people, the currency will go through three pilot stages and testing will be conducted with eth stakeholders, consumers, merchants, banks and payment service providers.

The first phase of the e-cedi pilot has been done in which the design was approved by the central committee. After stating the parameters for the test phase and highlighting the technical, regulatory and economic requirements, e-cedi is made available for limited use.

On the basis of the first phase results, changes in the project will be introduced, to ensure its feasibility and large-scale effective implementation.

Presently, there is no precise timeline set by the Bank of Ghana regarding the national rolling out of e-cedi.

Bottom Line

There is a very limited information which is made available for the public by the Bank of Ghana regarding the Ghana digital currency. It will be right to say that more digital currency projects will be observed across the globe in the future, revolutionising  the whole digital payment market.