eCedi will serve as fulcrum to digital financial inclusion – BoG

The Assistant Director-Fintech Promotion and Innovation at the Bank of Ghana, Clarence Blay, says the central bank’s digital currency (the eCedi) will serve as the fulcrum of the country’s efforts to build a robust environment for efficiently delivering inclusive digital financial services to Ghanaians.

Mr. Blay, who was speaking on Wednesday, August 10, 2022 during a mobile money (MoMo) stakeholder forum in Accra organised by MTN Ghana, themed ‘Assessing the Impact of the Central Bank’s Digital Currency on the Future of Digital Payments’, said digitalisation is critical to engendering financial inclusion in the country; and that the eCedi will ensure the sector flourishes in line with government’s digitalisation agenda.

According to him, following monumental achievements in the financial technology sector, the central bank deemed it necessary to move beyond just creating a conducive and enabling environment for the sector – hence the decision to pursue the digital currency project.

“We have realised that the entities we have been regulating are doing a wonderful job. But we cannot just leave the financial service providers to continue doing what they are doing on the pretext that we have put in place enabling regulations. We also need to be actively involved in the space to deal with the inefficiencies that are currently there.

“So it is on this basis that the central bank, looking at bringing efficiency to this space, decided in November 2019 at the Monetary Policy Committee Meeting to embark on this wonderful journey of issuing or exploring the issuance of the central bank’s digital currency,” he said.

Mr. Blay said the issuance of digital currency being explored by the central bank is entirely different from all the products financial services providers being regulated by the BoG are offering Ghanaians.

“It is a fiat currency. It’s a digital form of the currency that you know; it’s like your physical currency in the sense that it’s a stored value. It is a unit of account and it serves as a system for measuring things that you buy, things that you sell, and things that you own. So, this is completely different from what we know and what we use,” he explained.

He further called on all stakeholders to give the Central Bank’s Digital Currency project the maximum support, assuring that there will be constant engagement every step of the way.

Already, the central bank has started piloting an offline version of the eCedi to be used for consecutive payments in areas yet to be connected to digital and Internet infrastructure.

The piloting is being carried out at Sefwi Asafo in the Western North Region, where select users in that community have been using it for daily purchases such as food, groceries and drinks.

The Head of Digital Banking at CalBank, Martha Acquaye – whose outfit has been involved in piloting the e-cedi, said the development has the potential to make markets more diverse and competitive at a time when innovation has introduced competition and increased inclusion – particularly in emerging markets and developing economies where fintech seems to have thrived, and more so in markets where the financial system has been less developed.

“We believe strongly that we were the right party for the pilot. We have deployed the eCedi on our App. The central bank has done a good job. The pilot has been a success. We from the commercial banks believe it should be interest-free. We encourage the central bank to consider interest-free digital currency,” she stated.

The CEO of Mobile Money Limited, Eli Hini, said the eCedi will lead to greater inclusivity in the financial sector, which will improve the speed of liquidation for money with more security.