E-cedi: Ghana is introducing a digital currency, here is everything to know
Ghana has signaled its willingness to venture into the digital currency area as part of the country’s digitization agenda and tried to introduce new technologies in the fintech sector.
The governor of the country’s central bank, Dr. Ernest Addison, noted that his team is at an advanced stage in adopting a digital currency called the e-cedi.
At a press conference on May 31, Dr. Addison, before it goes into circulation, the digital currency would first go through three phases: design, piloting, and implementation.
Dr. Addison also revealed that the digital currency also went through the first phase, which involved creating the money. He also noted that the final phase will involve testing the digital currency to see how feasible it will be.
“The Bank of Ghana was one of the first African central banks to announce that we are working on a digital currency that explores the concept of an e-cedi,” he said, according to a local medium.
“Yes, we are quite advanced in this process. As you know, things like this have to be phased and the first phase was really focused on the design of the electronic money and the team, which has gone pretty far in the design phase, is looking at the implementation phase, ”he added.
He stated that in the implementation phase, some people would be able to use the digital cedi for the mobile money applications and other applications currently operating in the country.
“This pilot will help us determine if this is feasible and what things need to be tweaked to make it work effectively,” he said.
This makes Ghana one of the first African countries to declare that it is working on a digital currency. It has made more progress than any African country. South Africa is in the research phase. China, on the other hand, is the first major economy in the world to adopt a digital currency, the digital yuan.
Ghana’s digital currency is not Bitcoin. Bitcoins are controlled by private companies and are subject to market volatility that makes them unfit to perform the standard functions of money.
However, Ghana’s digital currency is backed by the state, which makes it much safer for digital currency skeptics.
“That’s why I think that digital money, which is supported by the state and central banks, is much more important,” said Dr. Addison. “These private forms of money are really not able to fulfill the functions of money effectively”.