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Ghana CBDC Development: A New Central Bank Document Outlines the Key Factors for Issuing Digital Currency

The Bank of Ghana (BOG) has released a statement outlining several of the primary reasons for constructing the central bank’s digital currency (CBDC). Additionally, the bank’s governor states in the paper that the organization is open to recommendations that may aid in the effective introduction of the digital currency.

The advantages of CBDC

Ghana’s central bank has published a document outlining the primary reasons for its intention to launch a central bank digital currency (CBDC). Additionally, the document discusses the design of the digital money and the benefits it will bring to the Ghanaian economy.

As previously reported by News, the Bank of Ghana (BOG) began creating the CBDC in 2021, with aspirations of piloting the digital currency by the end of the year. The BOG picked Giesecke Devrient as their implementation partner in August 2021. Prior to that, Mahamudu Bawumia, Ghana’s vice president, lauded the central bank’s proposal to launch the digital money. Additionally, he stated that such a currency may bolster intra-African commerce.

On the other side, certain stakeholders, such as the blockchain advocacy group Afroblocks — which asserted that it was not contacted — encouraged the central bank to develop a digital currency that is not based on “old traditional compartmentalized financial thinking.” This, Afriblocks reasoned, increases the likelihood of e-cedi success.

However, in an accompanying statement, BOG Governor Ernest Addison appears to address opponents’ concerns. Addison claims in his statement that the BOG will “engage stakeholders extensively to the degree practicable to ensure their active participation and successful implementation.”

Financial Inclusion

The BOG stated elsewhere in the statement that it “considers CBDC to be critical to a progressive and digitally inclusive society.” It adds that it has subsequently developed the digital currency to help the central bank achieve its strategic goals, one of which is financial inclusion.

“The e-design Cedi’s concepts, particularly its accessibility and consecutive offline payments, would support to the government’s goal of digitizing Ghana’s society and boosting financial inclusion,” the document states.

Other strategic objectives for the digital currency include assisting in the digitization of the economy and increasing consumer use of digital payments. Additionally, the BOG asserts that the e-cedi would mitigate the risks posed by “unregulated privately created digital currencies.” On the other hand, a digital cedi would be able to “satisfy demand for digital currencies without generating systemic hazards.”

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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