A fascinating initiative announced recently involves what will probably be one of the first government-backed digital currencies in Africa – if it happens.
The Bank of Ghana has got together with global security technology group Giesecke+Devrient (G+D) to pilot what is described as a general-purpose central bank digital currency (CBDC) – in effect a digital version of the cedi.
G+D is providing the technology and developing the solution adapted to Ghana’s requirements; it will be tested in a trial phase with banks, payment service providers, merchants, consumers and other relevant stakeholders.
The project is part of the Digital Ghana Agenda, which involves the digitisation of the country and its government services. The digital cedi, or e-cedi, is intended to complement and serve as a digital alternative to physical cash. It will play a part in facilitating payments without a bank account, contract, or smartphone; thus, it is hoped, it will boost financial inclusion.
In the design phase, all framework parameters for the CBDC pilot will be specified and defined. These include the country’s economic, regulatory and technical requirements as well as the definition of the parameters for the test phase. In the pilot phase, a user group of diverse demographic and socio-economic backgrounds will test the solution in the field using different channels and form factors such as mobile apps and smart cards.
Over the course of the pilot project, a study will be conducted on the acceptance of the e-cedi from the end users' perspective. The IT security of the infrastructure, the impact of the project on monetary policy and payment system, and the legal implications will all be evaluated.
A nationwide rollout of the e-cedi will eventually follow but, so far, there appears to be no precise timescale for this process.