The CBDC race is on, and central banks all across the globe are either eyeing the launch of a state-backed cryptocurrency or studying the feasibility of its use. The most recent development in this regard comes from Ghana, as the governor of Ghana’s central bank, Ernest Addison, recently announced that his institution is now “in the advanced stages of introducing a digital currency.”
In Africa, cryptocurrency transactions are soaring. On a continent where mobile money is already widely used, a virtual currency has a number of advantages for a young, tech-savvy population. During a news conference on May 31, Addison also reaffirmed the Bank of Ghana’s (BOG) commitment to preserving its position as Africa’s leader in embracing innovative financial innovations.
“The Bank of Ghana was one of the first African Central Banks to declare that we were working on a digital currency looking at the concept of an e-cedi,” Addison said.
E-cedi Coming Soon?
According to one local media report, the BOG chief explained the essential stages that the digital cedi is expected to go through before it is released to the public. According to Addison, the digital cedi has already passed through the preliminary phase, which included “the design of electronic money.” When this step is finished, the BOG will proceed to the implementation stage. Addison went on to explain:
“After the implementation phase, we have a pilot phase where a few people would be able to use the digital cedi on the mobile applications and other applications that are currently running.”
According to the governor, the implementation stage will assist the central bank in determining the project’s feasibility. According to the governor, the implementation stage will assist the central bank in determining the project’s feasibility.
The BOG governor then went on to compare the e-cedi with Bitcoin, citing that “unregulated” cryptocurrencies like bitcoin (BTC), are “too volatile to play the function of money.” He went on to back the CBDC, adding:
“I think there is a lot more emphasis on looking at digital money which is backed by the state, backed by the central banks. These private forms of money really are not able to perform the functions of money effectively.”