Bank of Ghana commences piloting of digital currency in Sefwi Asafo

The Bank of Ghana has started piloting the first digital currency known as the ‘e-Cedi’ in the Western North region of the country.

The move is part of efforts to determine its feasibility and subsequent circulation as well as the Bank’s commitment to enhance the use of digital financial services in the country.

Also,  the outcome of this piloting phase is crucial to rolling out the e-cedi on a full scale.

Speaking at the 6th Ghana CEO Summit in Accra, Governor of the Central Bank, Dr. Ernest Addison noted that digitising the offline transactions of rural and frontier households holds the key to creating the necessary market linkages that could result in access to finance in future.

“In keeping with the Bank’s commitment to digitization of the sector, the eCedi project is progressing steadily. Since financial inclusion is one of the objectives for embarking on the CBDC pilot, the Bank has deemed it necessary to test an offline version of the eCedi that can be used for consecutive payments between individuals and merchants, where there is no connectivity infrastructure, just like cash.

So far, the usage and uptake of the offline version of the eCedi is being piloted in a small town called Sefwi Asafo in the Western North region. Select users in that community have been using the eCedi for daily purchases such as for food, grocery and drinks. The Bank will continue to work with these users to obtain the critical usage data that will inform the decision about the eCedi’s future after the pilot. These are clearly landmark events in providing digital leadership with the payment systems, to lead to a digitised economy in the near future,” he said.

The introduction of the E-Cedi is part of the ‘Digital Ghana Agenda’, which involves the digitization of the country of 30 million people and its government services.

The digital Cedi, or ‘e-Cedi’, is intended to complement and serve as a digital alternative to physical cash, thus driving the Ghanaian cashlite agenda through promotion of diverse digital payments, while ensuring a secure and robust payment infrastructure in Ghana.

It also aims to facilitate payments without a bank account, contact, or smartphone, by so doing boosting the use of digital services and financial inclusion amongst all demographic groups.

The project will be divided into three phases: design, implementation, and pilot.

In the design phase, all framework parameters for the CBDC pilot will be specified and defined.

These include economic, regulatory and technical requirements of the country as well as the definition of the parameters for the test phase.

In accordance with these individual requirements, G+D’s CBDC solution would be adapted for the Ghanaian context in the second 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.

In addition, the IT security of the infrastructure, impact of the project on monetary policy and payment system, and the legal implications will be evaluated.

Insights from pilot user experiences would provide Bank of Ghana and G+D with
valuable lessons for a nationwide rollout of the e-Cedi.

Dr. Ernest K. Y. Addision, Governor of Bank of Ghana, has stated that “CBDC presents a great opportunity to build a robust, inclusive, competitive and sustainable financial sector, led by the Central Bank. From all indications, the concept has a significant role to play in the future of financial service delivery globally. This project is a significant step towards positioning Ghana to take full advantage of this emerging concept.”

“Central banks around the world are exploring the introduction of digital money as legal tender. The Ghanaian government is one of the first African countries now entering a pilot phase. We are proud to support Ghana with our technology and expertise,” emphasized Dr. Wolfram Seidemann, CEO of the Giesecke+Devrient Currency Technology business sector.

Filia, G+D’s CBDC solution, combines the advantages of today’s cash with the needs of users in an increasingly digitized world. Filia guarantees outstanding security, high availability, and resilience, as well as the ability to protect user data while complying with regulatory requirements.

In addition, the solution enables secure, consecutive offline payments in case no network connection is available.