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Ghana plan to test its digital currency, e-cedi


Ghana is the most recent nation on the African continent to begin assessing the viability of its digital currency backed by the Central Bank, known as the eCedi. This comes as the competition to introduce e-currency on the continent has become increasingly hot.

Following the launch of the e-naira in Nigeria in October last year. Ghana and South Africa are now participating in the pilot phase of the procedure.

An offline version of the eCedi is being tested in the teeny-tiny village of Sefwi Asafo, located in the Western North Area in Ghana. The test involves the usage of a contactless smart card. An application called digital wallet could be used  for payments utilizing the retail Central Bank’s digital currency, which is known as eCedi. They can make these payments between customers and businesses.

Ernest Addison, governor of the Bank of Ghana, decided to test the eCedi in a region of the country that has very little to no network infrastructure to further the cause of financial inclusion.

Addison made the following remark around a month ago at the sixth annual CEO Summit in the country: “Digitalizing the offline transactions of frontier and rural households holds the key to developing the essential market connections that could result in access to funding in the future.”

A fraction of the people in Sefwi Asafo makes use of the eCedi to buy groceries. The bank announced that it would continue collecting vital user information from the transactions to decide what would happen to the eCedi after the trial. 

In a presentation, Addison said these changes are “certainly landmark events in giving digitalized leadership with payment systems, which will lead to a digitalized economy in time to come. 

South Africa, on the other hand, is testing wholesale Central Bank Digital Currencies through two pilot projects. As part of Project Khokha, the first study looks at how banks make use of electronic currency to send money to other banks. The second study looks at payment transactions between the central banks of Malaysia, Singapore, Australia, and the South African Reserve Bank. 

The most recent research from the International Monetary Fund (IMF) suggests that central bank digital currencies (CBDCs) that permit cross-border transactions may help cut costs of transfer as well as make it quicker, simpler, and cost-effective to send remittances.

According to the IMF, quicker clearing of cross-border payments will improve trade even inside the country and abroad.

According to recent pronouncements, the process of introducing regulated vitual currencies is currently in the pilot, development or research stage in at least fifteen different African states.

According to the tracker maintained by the Central Bank Digital Currency, four countries have announced their intention to deploy digital money in 2022: Zambia, Uganda, Sudan, and Rwanda.

TemTum, a technological business that operates out of the United Kingdom and has its headquarters there, and Uganda’s Central Bank have been negotiating to establish a CBDC. Because a blockchain network can permit high-value transactions at a lesser cost, Uganda is exploring implementing one to manage its digital currency because of this benefit.

TemTum brags about having a state-of-the-art encryption system and blockchain technology  that it asserts to be exceptionally speedy, protected from quantum attacks, highly scalable and efficient with energy. 

In addition, Zambia is contemplating adopting a system that will cut down on costly transactional fees and expand access to financial services. At the latest, the nation’s Central Bank anticipates completing its examination by the 4th quarter of 2022.

Previous statements by Kenya and Zimbabwe indicated that the countries intended to adopt digital currencies last year; however, no nation has done so as of yet.

Eswatini, Morrocco, Namibia, Egypt, Tanzania,  Tunisia, Mauritius and Eswatini are among the countries actively conducting research in this area.

Nigeria is working on expanding the usage of its electronic currency known as the e-Naira, and the country is planning to make it available to millions of users of feature phones via a technology known as Unstructured Supplementary Service Data. A meagre slightly above eight hundred thousand people have adopted the  currency since it was first made available. It is a dismal adoption rate.

CBDCs, especially if designed for use offline, have been suggested by Raw IMF in its weekly blog as a potential method by which people who have never had bank accounts gain access to financial services.

According to the International Monetary Fund (IMF), they could utilize basic feature phones to carry out online transactions in isolated areas where there is no or little Internet connectivity to the internet for very little or no expense. 

After Jamaica’s JAM-DEX went live, 10 countries officially introduced their digital currencies.

The American research group, The Atlantic Council, thinks that number will go up because 50 countries are now in the advanced stages of exploring, developing, testing, or launching CBDCs; China is currently testing a CBDC, as well as other reasons. 




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