Bank Of Ghana To Launch First CBDC Pilot In Africa
Close on the heels of Jamaica, West African country Ghana is also getting ready to launch a pilot for the first general purpose Central Bank Digital Currency (CBDC) in Africa. To this effect, Bank of Ghana has inked a deal with German currency technology provider Giesecke+Devrient or G+D, to implement the pilot CBDC project as a precursor to the issuance of a digital form of the national currency, the Cedi.
The project 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.
G+D is providing the technology and developing the solution adapted to Ghana’s requirements, which will be tested in a trial phase with banks, payment service providers, merchants, consumers and other relevant stakeholders. G+D will offer its proprietary CBDC solution known as Filia for the pilot.
Originally specializing in high-quality currency and securities printing, G+D is now focused on digital payments and CBDC technology in recent years. It has been working with at least six central banks like the Bank of Thailand in piloting CBDCs.
This CBDC project is expected to drive the Ghanaian cashlite agenda through the 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, contract, or smartphone, which will boost the use of digital services and financial inclusion among all demographic groups.
The project will be divided into three phases – the design, implementation and pilot phases. The design phase will see all framework parameters for the CBDC pilot and the test phase being specified and defined, including economic, regulatory and technical requirements.
G+D’s CBDC solution would be adapted for the Ghanaian context in the second phase. The pilot phase will then be launched for a user group of diverse demographic and socio-economic backgrounds to 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. The IT security of the infrastructure, impact of the project on monetary policy and payment system, and the legal implications will also be evaluated.
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. Other African countries such as Morocco, Egypt, Kenya and South Africa also continue to explore the feasibility of CBDCs.
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