Dr. Ernest Addison, Governor of the central bank of Ghana has disclosed that the launch of the e-cedi has been delayed due to the impact of the economic upheavals which began in 2022.
According to the Governor, significant progress has though been made in development of the e-cedi, the country’s digital currency, which forms an important part of the country’s plan to expand financial inclusion and enhance digitalization.
But for the high inflation rates and cedi’s depreciation, which occurred during the economic dislocation in 2022, Dr. Addison indicated that the Bank of Ghana had initial plans to launch the e-cedi in 2022, thus had to make it clear of a more convenient time to outdoor the innovation.
“In 2022, we had a very major dislocation of the economy. That is not the context in which you want to launch a digital currency. So, we had to slow down the process and refocus our efforts on the macro environment, trying to bring inflation down.
“At a certain point, we will go back to the e-Cedi project and decide on the launch date.”
Dr. Ernest Addison
Further, Dr. Addison noted that the pilot phase has been completed, with selected consumers at Sefwi Asafo in the Western North Region making use of the innovation to buy items, goods, food and services.
The piloting stage was an important step toward expanding financial inclusion and driving digitalization in the country.
Bank of Ghana (BoG) adopted a retail token-based Central Bank Digital Currency (CBDC) as the ‘e-Cedi of choice’, which enables the currency to be stored locally on a card, on a phone or a smart device, and made transferrable from one user to another.
The retail CBDC is digital cash that is designed to take on most traditional attributes of physical cash, as well as have other additional functionalities depending on its final design.
Dr. Addison assured that although the Bank’s priorities may have shifted due to the events of 2022, progress is still being made toward launching the e-Cedi at a later date when the economic issues are largely settled.
The pilot was an important part of this progress, he noted, as it allowed the central Bank room to test an offline version of the digital currency that could be used in situations where there is no connectivity infrastructure, just as in the case of holding and using cash.
Successful deployment of e-cedi expected to augment digitalization and enhance financial inclusion
Financial experts believe that successful deployment of the e-Cedi could have a significant impact on the country, helping to augment government’s digitalization agenda and foster financial inclusion.
They also hold that the e-cedi will also position the Bank of Ghana as an active regulator and facilitator of a digital economy, helping to reinforce its role in the country’s financial landscape.
Despite how disappointing the delay in launching the e-cedi may be for some, the Governor’s words of taking a thoughtful approach to development of the digital currency brings back hope.
Meanwhile, the central Bank will be positioning itself for success when it eventually launches the e-cedi by first prioritizing stabilization of the macro environment.
Globally, it is recorded that interest in Central Bank Digital Currencies (CBDC) has escalated in the past few years. The BIS survey in 2021 on CBDC reveals that: 86 percent of central banks were actively researching the potential for CBDCs, 60 percent were experimenting with the technology and 14 percent were deploying pilot projects.
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