By Shelly Melancon (Switzerland)
According to Ernest Addison (Ghana’s central bank governor), the country’s apex bank is almost on the verge of “having its digital currency.” But Mr. Addison disclosed that the virtual currency will be called the e-cedis and will only be released after successfully passing through a 3-phase process.
Ghana’s Apex Bank Utilizing New Tech Trend
While participating in a news conference last month, the central bank governor revealed that the country’s apex bank is embracing new financial tech to maintain its top banking position in Africa. Addison remarked that “the bank of Ghana is among the few African central banks to reveal that it’s creating a virtual currency which it had temporarily named the e-cedi.” Mr. Addison revealed through a local media outlet that the virtual cedi had completed its first phase (the design phase), noting that it will complete two more phases before its public release. The implementation and pilot phases are the second and third phases, respectively. Addison explained that there would be a test run of the digital cedi with a few people via various apps, especially their mobile apps. However, the governor pointed out that the viability of the digital cedi depends on the success rate of the implementation stage, and the bank will make a final decision based on the outcome of this stage.
Comparing ‘Unregulated’ Digital Currencies with e-Cedi
During that news conference, Addison cleared the air on the differences between ‘uncontrolled’ virtual currencies such as bitcoin and the government-supported e-cedi. He remarked that the central bank’s digital currency is safer for investors as bitcoin and similar coins remain too volatile as an investment. Addison continued, “I am sure there is a tendency for most people to compare state and central-bank-backed virtual money with other digital monies. But these other cryptocurrencies can’t perform money roles more adequately than the government-backed ones.”
As a result of this announcement, Ghana is one of the select African countries making profound progress in having a state-supported digital currency. Most other African countries arent making any effort towards this emerging FinTech.
CBDC: South Africa Set to Emulate Ghana
Meanwhile, South Africa looks set to join Ghana in having its digital currency too. Last week, South Africa’s reserve bank (SARB) issued a press release to research the viability and suitability of having its digital currency. The main focus of the research will be on how south African consumers can utilize a local CBDC for retail use. Part of the research will also include trial tests of the CBDC on various tech platforms. The SARB expects to conclude its research by next year. But it’s yet to decide whether to offer a retail central bank digital currency. The statement further revealed that project Khokha is different from this digital currency research as Khokha’s focus is to enhance policy alignment and coordination between commercial banks and wholesale stakeholders.
Per a recent price water coopers (PwC) research, over 60 central banks in various regions are currently considering the adoption of CBDC.
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