By Shelly Melancon (Switzerland)
Ghana is set to begin exploring its Central Bank Digital Currencies (CBDCs) through an offline deployment expected to begin soon. This move will see the West African nation join Nigeria and other countries that are deploying CBDCs.
According to a Bloomberg report, Kwame Oppong, the Head of Fintech and Innovation at the Bank of Ghana (BoG), stated yesterday at the Ghana Economic Forum that the country’s CBDC, called the e-cedi, will offer support for offline transactions so that deployment is inclusive for everyone, including Ghanaians who do not have access to electricity, internet, or banking services. He went on to say that the e-cedi will be fully operational across all economic and financial platforms in the country without limitations.
According to Oppong, the e-cedi would be ready for use in offline transactions via smart cards. Smart cards are plastic cards that, like credit cards, have interactive chips that are linked to a preloaded account. Smart cards enable users to conduct offline transactions without requiring the use of a payment processing platform.
The Rise of CBDCs
CBDCs are new and innovative technologies that make the legal currency of any country available as digital tokens that are accessible on smartphones. Since last year, several countries around the world have announced that they are working on creating digital versions of their legal tenders to embrace the new digital money technology.
Also read:The rise of cryptocurrencies has caused governments to recognize the value of digital tokens, but their fear of decentralized money has made them hesitant to adopt any of the mainstream cryptocurrencies for use. Rather, countries are now minting digital tokens that can be exchanged for fiat currency. So far, China has led the way, having deployed over $30 million in Digital Yuan within a few months of its launch. According to sources in the United States, the country is researching digital token technology and may be interested in minting digital dollar tokens.
In Africa, Nigeria announced in August that it would launch its digital token, the e-Naira, on October first but a later announcement revealed that the launch date was moved indefinitely. Ghana’s intended offline launch will mark the first attempt by a West African country to launch a CBDC.
Expected challenges as Ghana launches its CBDC include poor access to the internet, uneven electrical distribution, and double-spending (counterfeiting). With Ghanaians able to load their offline cards with the e-cedi, it might open up channels for fraudulent users to cook up counterfeiting schemes that will endanger the project.
The launch of the Ghanaian e-cedi comes over two years after the Ghanaian government announced in 2019 that it was working on a digital token project. It also announced then that the project will be carried out in stages.
Global digital tokens adoption is rising. Europe’s reserve bank, The European Central Bank (ECB) is set to deploy the digital Euro tokens on a two-year term as part of the initial phase of the European digital token project.
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