Ghana’s Central Bank Outlines Reasons for CBDC Development

A document was released recently, which highlighted some of the key reasons for the central bank of Ghana looking into developing a central bank digital currency (CBDC). Furthermore, the document also shows that the governor of the central bank said that the institution was ready for any suggestions that could assist it in launching the digital currency successfully. The document was released by the Ghanaian central bank and other than talking about their key motivations for issuing a CBDC, it also talked about the design they are using. Furthermore, the Bank of Ghana (BOG) also discussed the benefits the digital currency could provide to the Ghanaian economy.

It had been reported previously that Ghana’s central bank had begun its preparation for developing a central bank digital currency (CBDC) in 2021 and they were hoping to begin a pilot program for the digital currency before the year’s end. The BOG had reported in August 2021 that they had decided to partner with GieseckeDevrientfor implementing the CBDC. Before that, the vice president of Ghana, MahamuduBawumiahad appreciated the plan of the central bank about issuing a digital currency in the country. He had also stated that this CBDC could be helpful in boosting intra-Africa trade.

In contrast, some of the other stakeholders that had not been consulted about the project, including Afroblocks, which is the blockchain lobby group, said that the central bank should not design a digital currency that follows the traditional financial thinking. Afroblocks said that this would enhance the chances of success of e-cedi. The BOG governor also made a statement in the document and he responded to the concerns that have been raised by the critics. Ernest Addison, the governor said that the central bank of Ghana would engage with the stakeholders extensively as much as possible in order to ensure their participation actively and for the successful implementation.

The BOG also said in the document that it believes the CBDC can be of the utmost importance in order to ensure a digitally inclusive and progressive society. It also said that they had developed the digital currency in a way that it can meet the strategic goals of the central bank and one of these goals is that of financial inclusion. The document said that the design of the e-Cedi would help the objectives of the government in digitizing the society in Ghana and promote the concept of financial inclusion, which would include consecutive offline payments and accessibility.

There are some other strategic goals of the BOG that the digital currency has to meet, which include digitizing the economy of the country and also enhance the adoption of digital payments amongst the consumers. Furthermore, the BOG said that the e-Cedi would also come in handy for mitigating the risks that are associated with privately issued digital currencies that are mostly unregulated. In comparison, a digital cedi would not have any systemic risks and also suffice as a digital currency. Many other countries around the world are working on developing their own CBDCs.