Ghana is one of the few African countries that is hopping on the cryptocurrency train. The country is particularly taking concrete steps towards embracing this innovation. During the Fifth Ghana International Trade and Finance Conference in Accra, The Vice President of Ghana – Dr. Mahamudu Bawumia – said that African governments should embrace virtual currencies. His reason was that it would boost trade and strengthen other productive sectors of their economies.
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According to Dr. Bawumia: “Digitisation has also become one of the most consequential policies of the Nana Akufo-Addo government. When the scourge of the COVID-19 pandemic hit and forced many economies into partial and total lockdowns, it reinforced the need to pursue digitization.”
Giesecke + Devrient And Central Bank Digital Currency
According to this Wikipedia article, Giesecke+Devrient (G+D) is a German company headquartered in Munich that provides banknote and securities printing, smart cards, and cash handling systems. One of the payment solutions that G+D offers is designing a secure digital future through CBDC.
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“As digital forms of payment continue to grow in number and popularity, we believe that there is a need for a government-backed digital currency that is safe, secure, and trusted. CBDC is a digital version of physical cash,” G+D explains on its website.
The central bank issues it and it is pegged to a local currency and made available to everyone, everywhere. It has the same characteristics as cash – as well as the added benefit of being digital. G+D works with Central Banks all over the world. Basically, it develops a universally accepted and accessible legal tender that is anonymous, yet transparent, while ensuring the highest security.
Bank Of Ghana’s Partnership With Giesecke + Devrient
On the 11th of August 2021, the Bank of Ghana and Giesecke + Devrient put out a joined press release. This document contains information on a partnership between both parties to pilot a general-purpose Central Bank Digital Currency (retail CBDC) in Ghana. The press release states that “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.” This CBDC project has three phases: design, implementation and pilot.
Digital Ghana Agenda
The project is part of the ‘Digital Ghana Agenda’. This agenda 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. It aims to ensure a secure and robust payment infrastructure in Ghana. Also, it aims to facilitate payments without a bank account, contract, or smartphone. Thereby boosting the use of digital services and financial inclusion amongst all demographic groups.
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Dr. Ernest K. Y. Addision, Governor of Bank of Ghana, also 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.”
Total crypto market cap balances above $1.9 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from iStock, chart from TradingView.com
