BoG Governor unveils e-cedi project at IMF meetings
GOVERNOR of the Bank of Ghana (BoG), Dr. Ernest Addison has underscored Ghana’s commitment to innovation in the financial sector, through the introduction of the e-Cedi as a central bank-issued digital currency presents exciting possibilities for financial inclusion.
In his insightful remarks at the recent International Monetary Fund (IMF) meetings in Marrakech, Morocco, Dr. Addison provided an in-depth look into Ghana’s pioneering journey toward a digital currency, known as the “e-Cedi,” during a panel discussion at the high-profile event.
The central theme of his remarks revolved around the BoG’s groundbreaking decision to explore the concept of a digital currency for Ghana, a move that marks a pivotal juncture in the nation’s financial landscape.
The governor detailed how the BoG 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 program, launched approximately one year ago, which Dr. Addison described as highly successful.
One key aspect that made this pilot program thrive was the enthusiastic participation of Ghana’s vibrant and youthful population. 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 underscored that this digital currency is 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. Cybersecurity threats were acknowledged as a priority for the bank, and technology partners were diligently working to ensure robust security for the new digital currency. Preventing misuse and illegal activities was another focal point.
Transitioning from the e-Cedi to the innovative “hackathon” initiative, Dr. Addison discussed the recently launched program 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.
Furthermore, the issue of international competition with digital currencies like the digital Euro was addressed. Dr. Addison clarified that the e-Cedi is designed as a non-interest-bearing token, ensuring that it does not directly compete with interest-bearing bank accounts. Commercial banks are expected to serve as distribution channels for the e-Cedi. Nevertheless, cross-border compatibility remains a challenge that requires international coordination.
The Governor firmly positioned the e-Cedi as a tool for financial inclusion, highlighting its potential to extend financial services to remote areas of the country where traditional banks are not accessible. This inclusion, Dr. Addison pointed out, has significant implications for international transfers and, notably, remittances. The cost-effective and secure use of digital currencies for these transactions is a top priority for Ghana.
