The introduction of a Ghanaian digital currency by the Bank of Ghana (BoG) is currently in the advanced stages: the Governor of the Bank of Ghana, Dr Ernest Addison has said.
Speaking at a press conference Monday (31 May) Dr Addison said, the e-cedi will go through three phases before it goes into circulation.
He said in the final stage before its introduction, a pilot would determine whether the digital currency will be feasible before it goes into circulation.
“The Bank of Ghana was one of the first African Central Banks to declare that we were working on a digital currency looking at the concept of an e-cedi.”
Dr Addison added, “Yes, we are quite advanced in that process. As you know, with these types of things, you have to go at it in phases and the first phase was really on the design of the electronic money and the team that has gone quite far in the design phase, they are looking at the implementation phase.
“After the implementation phase, we have a pilot phase where a few people would be able to use the digital cedi on the mobile applications and other applications that are currently running.
“From that pilot, we will be able to determine whether this is feasible and what sort of things need to be tweaked to make it work effectively,” he said.
E-cedi will be less volatile than bitcoin
He also reiterated a warning to the public that the activities of cryptocurrencies were currently not regulated because of their volatility.
Dr Addison said cryptocurrencies such as Bitcoin were too volatile to play the function of money hence the need for a state-backed digital currency such as the e-cedi.
He said, “You have seen the sharp changes in the valuations of some of these coins, the Bitcoin large, large swings in the value of the currency. The basic function of currency is for them to be used effectively as a medium of exchange or even as a unit of account, so when you have a currency whose value is so unstable, you really cannot use it effectively to meet any of the standard functions of money.
“This is why, I think there is a lot more emphasis on looking at digital money which is backed by the state, backed by the central banks. These private forms of money really are not able to perform the functions of money effectively,” he added.
In November 2019, the BoG said it was considering the possibility of issuing a digital currency in the near future.
Dr Addison “The Central Bank is in discussion with key stakeholders to explore a pilot project (in a sandbox environment) on central bank digital currency with the possibility of issuing the e-cedi in the near future.”
He said, in an increasingly digitised environment, the BoG has evaluated its role in a digital economy.