Ernest Addison, BoG Governor, said the bank would launch a sandbox project in view of exploring a possible e-Cedi soon. While there is no confirmation that it is a blockchain-based project, indications are that it would be.
Ghana, like other African countries such as Rwanda and Sierra Leone, is keen on digitizing its financial and banking sectors. With emerging technologies such as blockchain, the West African country wants to provide possible solutions to a multiplicity of infrastructural challenges that have traditionally been a pain in the neck of developing economies.
With the inherent transparency obtainable for blockchain-based financial systems, developing countries can finally break free of the corruption which plagues them.
Ghana is one of Africa’s leading economies, and the adoption of an e-currency falls in the line of its efforts to maintain a digital financial landscape. The present administration is not new to leveraging technology for the reformation of institutional and regulatory processes.
Ghana’s financial industry is witnessing substantial growth. The country’s position as the fastest-growing mobile money market in Africa is evidenced by transactions rising to GHC 213 Bn (about USD 38 Bn) in 2018 up from GHC 78.5 Bn (USD 14 Bn) in 2016.
According to the 2017 Global Findex database, access to formal financial services rose from 41 percent of adults in 2014 to 58 percent in 2017. The increase is attributable to mobile accounts, as 20 percent of digital wallet users were previously unbanked.
According to data from the Bank of Ghana, the total value of all mobile money transactions reached USD 29 Bn in 2017, compared to USD 6.5 Bn in 2015. At its own pace, the range of mobile-accessible goods and services has successfully entered into the purchase of mobile communications credits and payment of bills.
A CBDC is not necessarily a cryptocurrency, but a digital version of a national currency. It does not mean other cryptocurrencies have been covered or approved by the regulation. Also, it does not necessarily need blockchain.
The digital currency for Uruguay, e-Peso, for example, had a pilot program that was not based on the blockchain. Issuing a central currency in a physical or digital format is usually followed by giving trust.
Elisha Akyaw – founder of Ghana-based blockchain startup BlockXAfrica and Senior Editor of BlockNewsAfrica – believes that Ghana’s move can be replicated in other African countries due to the growth of mobile payment in the continent.
“ In states where the majority of payments are becoming paperless, it is only logical that the currencies that back these payments become digital. I believe East African countries will be a great place to implement a CBDC,” he told WeeTracker.
Not all African countries welcome crypto. Five economies have placed a ban on digital currencies, with Burundi being the latest in the fold. Last month, it was rumored that Tunisia was going to launch the first CBDC in Africa. But the North African country called the news false, claiming only that it is working on finance digitalization.
As central banks move towards CBDCs, there could be a case for better regulatory environments for crypto assets, even though CBDCs they don’t need digital currencies to work.
In August 2019, the National Bank of Rwanda revealed that it was starting to research how to offer an official digital currency. The move was in the path to increasing transaction efficiency and foster economic growth in the East African country.
Similarly, the Zimbabwe Stock Exchange (ZSE) is considering to adopt blockchain in a move to refuel the country’s struggling economy. China has been working on their CBDC for years, reportedly is nearing completion and slated to become the first country to do so.
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