Bank of Ghana postpones CBDC rollout citing economic dislocation
April 4, 2023 5:45 AM
The pilot was a success, however there has been radio silence about the official launch due to issues outside of the team's control.
The Bank of Ghana (BoG) has declared that the debut of Ghana's proposed digital currency, the eCedi, has been postponed due to the state of the country's economy and other issues. This was revealed at the bank's 111th Monetary Policy Committee press conference on March 27 in Accra.
Dr. Ernest Addison, the bank's governor, stated during the news conference that while the pilot of the eCedi project was successful and progress was made, the project has not been launched due to a severe "dislocation" of the economy, including growing inflation and the erosion of the cedi's value.
Ghana's economy saw 54.1% inflation at the end of 2022, which Addison highlighted as detrimental to the time of the eCedi's debut.
Addison made the following observation:
"While we have completed the pilot we initiated, we had hoped to have the ecedi up and running by this point in light of our priorities. Unfortunately for us, 2022 occurred – a year in which the economy was severely disrupted, the inflation rate skyrocketed, and the currency lost a significant amount of value.
That is not the setting for the introduction of a digital currency. As a result, we had to slow down the process."
The Bank of Ghana announced plans to build the eCedi and presented a design paper in 2021.
Later that year, in Sefwi Asafo, a tiny town in Ghana's southwest, the bank began testing an offline version of the eCedi. The test was designed for Ghanaians who did not have internet connection and included hardware such as smart cards, watches, and wristbands.
Clarence Bay, a bank representative, stressed that BoG's eCedi will not be built on blockchain but on an undisclosed technology.
The eCedi, which the BoG believes to be a digital form of the cedi, is legal tender that can be exchanged for cedis in cash or deposit money at a 1:1 ratio.
In other news, following the Central Bank of Nigeria's adoption of a cashless economy, Nigeria, the first and only African country to establish a central bank digital currency (CBDC), has seen increased user acceptance.