Ghana's Central Bank Says Its Digital Currency 'eCedi' Will Help the Unbanked

Ghana's central bank has outlined details on its ‘eCedi' digital currency that it hopes will bring more people to join the national banking system. The Bank of Ghana has presented a digital paper advocating hardware wallet services for those Ghanians, who do not have access to internet and bank accounts. The West African country is planning its blockchain-based national digital currency in order to digitise its economy and axe corruption. eCedi was first mentioned by the Ghanian authorities last year in 2021.

“Bank of Ghana declared its intention to explore a CBDC within the framework of the financial sector digitalisation program. It is in pursuit of this goal that Bank of Ghana announced the concept of the eCedi — a digital version of the Cedi banknotes and coins,” Dr. Ernest Addison, the governor of the Bank of Ghana said in the introductory message of the digital currency.

A CBDC works a lot like cryptocurrency, but is built on a blockchain network and is virtual in nature. CBDCs, however, are regulated by central banks making their transactions centralised and traceable for a single authority, as opposed to the decentralised nature of traditional cryptocurrencies.

“In Ghana, the motives include a combination of factors such as; facilitation of financial inclusion, pursuit of a cash-lite economy, enhancing operational efficiency and cost-effectiveness in payments, and provision of a safe, secure and trustworthy alternative to privately issued digital currencies,” Addison noted.

In recent times, CBDCs are gaining popularity in several nations that wish to explore the blockchain tech, without having to deal with the volatility and risk factors associated with cryptocurrencies.

Jamaica, for instance, is pacing briskly towards the roll out of its CBDC named Jam-Dex. The Jamaican government will be gifting $16 (roughly Rs. 1,200) as an incentive to the first 100,000 adopters of Jam-Dex.

Meanwhile, Russia has already begun testing its CBDC named Digital Ruble.

In India, Finance Minister Nirmala Sitharaman has also confirmed plans to bring a national digital rupee in the coming days.