In Brief:
- Ghana begins working on the offline use of digital currency.
- The country’s CBDC, e-cedi, would work via use of smart cards
Taking a novel approach, Ghana is working to make central bank digital currency (CBDC) available for offline use.
Kwame Oppong, the Head of FinTech and innovation at the Bank of Ghana(BoG) said, “the country’s digital currency, the e-cedi, would work offline through the use of smart cards” while speaking during the 2021 Ghana Economic Forum.
A smart card or a chip card is embedded with an integrated circuit for electronic authorization. This would make it easy to work in “no network zones.”
Oppong added, “The e-cedi would also be capable of being used in an offline environment through some smart cards.” Thus, e-cedi would also prove to be a blessing to people who do not have access to bank accounts.
It was just in the month of August that Ghana had partnered with Giesecke+Devrient (G+D) to pilot the first general-purpose CBDC in Africa. Dr. Wolfram Seidemann, the CEO of the Giesecke+Devrient Currency Technology business sector had stated, “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.”
As of 2019, about 83.5% of the population of Ghana had access to electricity according to the World Bank Report. On the other hand, Statista reported that half of the country’s population has access to the internet (as of 2021).
A short time ago, the Bank for International Settlements (BIS) had also signalled Central Banks to evolve for the digital future. Also, many countries have been grasping and testing the implications of CBDC to safeguard public trust in money.
In the digital economy era, CBDC could make cross-border payments faster, cheaper and safer. This in turn would further facilitate fiscal transfers in the current times of pandemic.
Nigeria is on the way to bringing onboard its digital currency- e-Naira and similar trends are visible across European countries. No wonder CBDC is creating a buzz all around the globe!
