Ghana's CBDC eCedi: Inclusivity, A Primary Factor

The West African country Ghana has recently signified its plans on the Central Bank Digital Currency (CBDC), as the Central Bank presented a design paper.

The motives include an amalgamation of factors like facilitation of financial inclusion, the pursuit of a cash lite economy, enhancing operational efficiency, etc., highlighted Bank of Ghana’s governor.

Inclusivity is claimed to be the primary factor of the eCedi. Ghana’s CBDC would be made available for those with no access to the internet and banking.

Ghana, the West African country, is giving thoughts to the launch of its Central Bank Digital Currency (CBDC). The Central Bank of Ghana has highlighted a significant factor of its CBDC will be inclusivity.

The digital currency or eCedi would be open for even those who do not have a bank account or even internet access. The Bank has further proposed the utilization of a hardware wallet and other devices with the eCedi in a released design document.

What exactly Does Ghana Plan?

Earlier this week, Ghana’s Central Bank presented a design paper for CBDC eCedi. It recommended using a hardware wallet for the digital currency to facilitate access to the financial services to Ghanaians who do not even have a bank account or internet access.

Ghana is the most significant gold producer in Africa, and the government has now decided to digitalize the economy to increase fluidity and reduce corruption. Initially, the idea of Central Bank Digital Currencies was put forward last year.

The Bank highlighted its ideas that integrating digital payments would help legitimize the African economy, and in this way, it will make the eCedi adoption smoother. It has further specified its ideas for a retail, token-based CBDC.

eCedi’s offline feature facilitates the people in rural areas with minimal internet connectivity, which is influenced by the idea of an offline wallet. And to provide peer-to-peer transactions, the Central Bank has further offered smart cards, wallet devices, and smart wristbands.

According to Ernest Addison, the governor of the Bank of Ghana, the institution has declared its intention to explore a CBDC within the framework of a financial sector digitization program. And that it is in pursuit of the program that the Bank of Ghana announced the eCedi, that is, the digital form of the Cedi’s banknotes and coins.

He further highlighted that in Ghana, the motives include an amalgamation of factors like facilitation of financial inclusion, the pursuit of a cash-lite economy, enhancing operational efficiency, and payments cost-effectiveness. Along with providing safe, secure, and trustworthy options to privately issued digital currencies.

Various countries in Africa, including South Africa, are working or have somewhat already established the idea. Whereas the US is studying the digital dollar, China has also created a Digital Yuan pilot program.

The Bank of Canada has also very recently collaborated with the Massachusetts Institute of Technology (MIT) in order to work on a twelve-month research project that would aim at the design of a Central Bank Digital Currency.

The idea of Central Bank Digital Currency is growing in the minds of various global authorities by leaps and bounds. They continue to research the CBDCs vehemently. It is to look forward to whether CBDCs prove to be a strong concept globally.

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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing