The Bank of Ghana (BoG) has underlined that in recent years, the notion of central banks releasing digital currencies has been topical throughout the globe.
The Bank of Ghana (BoG) stated that it is one of the first few African central banks to proclaim its intention to test a Central Bank Digital Currency (CBDC) as part of its financial sector digitization initiative and the Government of Ghana’s broader digitalization agenda.
According to the CBDC classification, the digital Cedi (or eCedi) is a retail token-based CBDC, according to the BoG.
This is a value-based approach in which an eCedi symbolizes a token or a digital value note. Payment is made by passing the value note from one person to another.
The notion is similar to cash payment transactions, in which money is transferred from person A to person B by exchanging banknotes and/or coins. It is critical that the eCedi be adopted in order to avoid disruption to the existing payment space.
As a result, the eCedi will be incorporated into the Ghana Interbank Payment and Settlement Systems Limited’s current interbank payment systems and mobile money interoperability platform (GhIPSS).
The BoG stated in its study titled “Design Paper of the Digital Cedi” that “the eCedi has to be accessible to everyone and any part of the country. Absence of mobile data networks in the rural areas of Ghana should not serve as a barrier to the use of the eCedi. In other words, the eCedi should work effectively in both online and offline environments.
“Speed of payment is very important from a consumer`s perspective. The transfer of funds from a payer to a payee should be near instant easy to confirm and traceable. Both the sender and receiver should receive a confirmation of a successful transaction. Similar to cash, an eCedi transaction will be free of charge to consumers.
“By this approach, the eCedi would be a strong contender of cash, promote competition in the payment market and facilitate the provision of innovative valueadded services to individuals and businesses
by banks and payment service providers at affordable fees and charges.
“It is particularly important that the eCedi is implemented to forestall disruption to the existing payment space. For this reason, the
eCedi will be integrated into the existing interbank payment systems and mobile money interoperability platform operated by the Ghana
Interbank Payment and Settlement Systems Limited (GhIPSS).
“In the era of the globalisation, it is important that domestic CBDCs are designed with the prospects of adaptation for interoperability
with CBDCs of other jurisdictions. Efforts to accelerate integration of the economies of African economies, particularly under the African
Continental Free Trade Area (AfCFTA) makes this a key consideration in the eCedi design. The eCedi takes into consideration CBDC standards, making it possible for Ghana to participate in international projects on cross border CBDCs.”
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SOURCE: 3NEWS
