Dr. Ernest Addison, the Governor of the Bank of Ghana (BoG), has discussed Ghana’s digital currency at the IMF meeting, noting that the introduction of the e-Cedi will serve as a tool for financial inclusion, promoting the potential to extend financial services to remote areas.
According to Dr. Addison, the digital currency inclusion has significant implications for international transfers and, notably, remittances. The Governor, in his remarks, said the cost-effective and secure use of digital currencies for these transactions is a top priority for Ghana.
Dr. Addison provided an in-depth look into Ghana’s pioneering journey toward a digital currency, known as the ‘e-Cedi’. He explained that the Central Bank decided to explore the concept of a digital currency for Ghana, a move that marked a pivotal juncture in the nation’s financial landscape.
The Governor noted that the Bank collaborated with technology partners to delve into the digitalization of the Ghanaian Cedi, seeking to introduce a digital version of the national currency. “This ambitious project culminated in a pilot programme, launched approximately one year ago, which was highly successful,” he added.
Dr. Addison disclosed that one key aspect that made the pilot programme thrive was the enthusiastic participation of Ghana’s vibrant and youthful population.
Dr Addison noted that the youth’s engagement in digital innovations served as a catalyst, motivating the central bank to champion a domestic form of digitalization, and their trust in the institution played a pivotal role.
Dr Addison added that the digital currency was not privately issued but stems from the Central Bank itself, thus inherently garnering a higher level of trust.
While recognizing the potential of the e-Cedi, Dr. Addison acknowledged the challenges and concerns associated with digital currencies. He acknowledged cybersecurity threats as a priority for the bank, adding that technology partners were diligently working to ensure robust security for the new digital currency, coupled with preventing misuse and illegal activities.
Dr. Addison Clarifies e-Cedi Design
Dr. Addison clarified that the e-Cedi was designed as a non-interest-bearing token, ensuring that it does not directly compete with interest bearing bank accounts. He indicated that commercial banks are expected to serve as distribution channels for e-Cedi and nevertheless, cross-border compatibility remained a challenge that required international coordination.
Dr. Addison noted that the Bank after transitioning from the e-Cedi, moved to the innovative “hackathon” initiative, which was recently launched aimed at fostering fintech innovation.
The hackathon invites creative minds to devise various use cases for the eCedi, including applications in merchant payments, government transactions, trade, and remittances. This initiative is expected to run for three months, culminating in the presentation of potentially groundbreaking use cases developed by young innovators from Ghana.
The eCedi Hackathon is a cutting-edge competition that brings together the brightest minds in technology and finance to explore the endless possibilities of CBDC. This event is designed to foster innovation, drive technological advancement, and develop solutions that will redefine the Ghanaian financial landscape.
The growth of FinTech has proven the ability to expand financial services to more people and businesses. Looking to the future, Central Bank Digital Currencies (CBDCs) could further enable cheaper, faster and more convenient financial services for everyone.
Bank of Ghana in 2022 successfully piloted both online and offline use cases of the eCedi and how it could expand financial inclusion. To continue with this effort, Bank of Ghana, in partnership with EMTECH, invites you to participate in the first ever eCedi Hackathon, an exciting opportunity to pioneer transformative solutions in the realm of digital currencies.
