The Bank of Ghana (BoG) has stated that the idea of central banks releasing digital currencies has been popular in recent years all around the world.
The Bank of Ghana (BoG) claims to be one of the first few African central banks to declare its desire to test a Central Bank Digital Currency (CBDC) as part of its financial sector digitization program and the government’s overall digitalization strategy.
According to the BoG, the digital Cedi (or eCedi) is a retail token-based CBDC in terms of CBDC classification.
This is a value-based strategy in which an eCedi is used to represent a token or a digital value note. Transferring the value note from one person to another is how payment is made.
The concept is similar to cash payment transactions, where payment is done by transferring banknotes and/ or coins from person A to person B.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 its report titled “Design Paper of the digital cedi”, the BoG said “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).
- Prof. Quartey believes that the 1.5 percent E-Levy rate will have a negative impact on the GH6.9 billion target.
- The value of MoMo transactions fell by 8% between December and January as a result of the e-levy controversy.
“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.”
