The Bank of Ghana (BoG) has stated that it is still focused its retail central bank digital currency (CBDC) – the e-Cedi – despite the challenges posed by the current economic difficulties and the engagement with the International Monetary Fund (IMF).
In 2022, the BoG commenced its CBDC project by launching a pilot programme to test the e-cedi, both online and offline, in three locations across the country: Accra, Tarkwa, and Sefwi Asafo. The online pilots explored various use cases for online payments, including peer-to-peer (P2P), wallet-to-bank, merchant, and bill payments. In contrast, the offline experiment focused on merchant payments and aimed to test whether the e-cedi could work for consecutive offline payments, whether the target users could use it, and whether they would want to use it.
The decision to explore an offline CBDC was due to the importance of ensuring that any currency works for all Ghanaians, regardless of their location. While Ghana has seen the percentage of people with formal bank accounts increase significantly in the last decade, almost a third of the population remains unbanked. The BoG recognised the need to develop a digital currency that could be used by all Ghanaians, including those who are unbanked.
To enable the ecosystem, the BoG chose a token-based system rather than an account-based one. The e-cedi was minted and then distributed via commercial players, including one mobile money provider, two banks, and two payment service providers (PSPs). This approach aimed to ensure that the digital currency would be widely accessible and usable.
The pilot in Sefwi Asafo saw the e-cedi distributed via a smart card, and the BoG recorded that a significant percentage of participants were positive about the system. The focus on merchant payments was a deliberate decision, as nearly all such transactions in Ghana were still conducted in cash in 2017. The success of the offline experiment is a significant step towards the development of a digital currency that is accessible to all Ghanaians.
The BoG’s commitment to developing a CBDC reflects a growing trend among central banks globally. Central banks in several countries, including China, Sweden, and the United Arab Emirates, have already launched or are developing their digital currencies. The benefits of CBDCs include greater financial inclusion, enhanced security, and improved efficiency in the payment system. However, there are also challenges, such as the potential impact on monetary policy and financial stability.
The BoG’s CBDC project is still in the early stages, and it remains to be seen whether the e-cedi will be launched in Ghana. Nevertheless, the pilot programme is a crucial step towards achieving the BoG’s goal of developing a digital currency that works for all Ghanaians. As the global trend towards CBDCs continues, it will be interesting to see how central banks navigate the challenges and opportunities presented by this new digital frontier.