The deputy governor of the entity stated that the CBDC was fiduciary money. Soon, the digital cedi could be useful in mobile financial services applications.
Ghana has become the latest African nation to give further steps to the viability of a central bank digital currency (CBDC). The Central Bank of Ghana (BoG) will start in September this year a pilot program for the digital cedi, the country’s official currency, according to the Ghana Web outlet.
This was revealed by the deputy governor of the central entity, Maxwell Opoku-Afari, during a meeting in which the understanding of monetary policy in a post-pandemic was a highlight topic.
Ghana’s CBDC Would Run in Parallel with Fiat Currency
Opoku-Afari highlighted that the digital currency project is part of the central bank’s recognition of the need for digital payments and the digitization of financial services. Regarding this topic, the CBDC program would help to transform the African nation.
Opoku-Afari also noted that a digital currency could encourage financial inclusion, the efficiency, and stability of the payment system, as well as promote competitiveness in the financial sector.
According to the CryptoBriefing news portal, today many Ghanaians turn to non-bank mobile money services to store their wealth due to the ineffectiveness of the financial system. However, some providers of such services issue “electronic money”, which does not receive a supportive stance by cash.
Faced with this situation, Opoku-Afari highlighted that the digital cedi would be seen as a fiat currency that could be used by financial services and fintechs to add value to digital money. “The Central Bank’s digital currency is FIAT money, it is cash by itself, so that the financial institution, such as banks and Fintech companies, will be able to create added value in digital money.”
African Nations Are exploring the vast world of Digital Currencies
The Central Bank of Ghana previously showed interest in testing the viability of a CBDC back in 2019. At the time, BoG Governor Ernest Addison revealed that CBDC development would happen in a sandbox, with the possibility of issuing a Ghanaian e-cedi (national currency) shortly. Later this year, he assured that the bank was in the advanced stages of introducing a digital currency.”
He said that with this kind of thing, users would have to go through phases and the first phase was really into the design of the electronic money and the team that has gone quite far in the design phase, is looking at the implementation phase,” Addison added during a conference last month.
Although cryptocurrencies are not legal tender in Ghana, digital currency efforts show that the nation’s central bank is recognizing the need to set the financial system in digital currency. In May this year, the national regulators said that cryptocurrencies are not receiving regulations from the Commission.
Although the pilot will start its activities in September 2021, a definitive schedule for the possible launch of a digital cedi remains unclear. The entity’s deputy governor said last week that the bank’s pilot’s success rate would pave the way for the next stages.
By: Jenson Nuñez