Ghana’s central bank, German firm, pilot first digital currency in Africa

The Central Bank of Ghana says it is partnering with Giesecke+Devrient, a German firm, for the pilot phase of the general-purpose digital currency which the bank says will be tested in a trial phase with banks, payment services providers in the country as well as consumers.

The statement from the Ghanaian apex bank explained that the German firm, Giesecke+Devrient, will be making provision of the technology, as well as, the development of a solution which can be adapted to Ghana’s requirements as the testing will be carried with banks in the country, merchant consumers and other relevant stakeholders.

Ernest Addison, governor, Bank of Ghana, said 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.”

The bank governor also said 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’, Addison further explained, is intended to complement and serve as a digital alternative to physical cash, thus driving 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, by so doing boosting the use of digital services and financial inclusion amongst all demographic groups.

He pointed out that the project will be divided into three phases, comprising design, implementation and pilot.

“In the design phase, all framework parameters for the CBDC pilot will be specified and defined. These include economic, regulatory and technical requirements of the country as well as the definition of the parameters for the test phase. In accordance with these individual requirements, G+D’s CBDC solution would be adapted for the Ghanaian context in the second phase. In the pilot phase, a user group of diverse demographic and socio-economic backgrounds will test the solution in the field using different channels and form factors such as mobile apps and smart cards,” he explained.

Wolfram Seidemann, CEO of the Giesecke+Devrient Currency Technology business sector, in his comment on the partnership, said “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. We are proud to support Ghana with our technology and expertise.”

Meanwhile, over the course of the pilot project, Addison stated that a study will be conducted on the acceptance of the e-Cedi from the end users’ perspective. In addition, the IT security of the infrastructure, the impact of the project on monetary policy and payment system, and the legal implications will be evaluated. Insights from pilot user experiences would provide Bank of Ghana and G+D with valuable lessons for a nationwide rollout of the e-Cedi.