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Business News of Saturday, 28 August 2021


Ghana’s E-Cedi: What you need to know about the Digital Currency

The Bank of Ghana The Bank of Ghana

The Bank of Ghana (BOG) in September 2021 will pilot the digital Cedi currency also known as the E-CEDI.

This was announced by the First Deputy Governor, Dr Maxwell Opoku Afare, when he addressed the media on Monday, July 12, 2021.

In June 2021, the governor of the BOG, Dr Ernest Addison, disclosed that the digital currency (E-Cedi) is in the advanced stages and will go through three phases – design, implementation and piloting – before it goes into circulation.

The design phase, which involves the design of the digital money, is completed. After the design phase, the central bank will move to the implementation and the piloting stage where a few people would be able to use the digital cedi on their mobile applications and other apps that are currently running.

Ghana’s central bank partnered with a U.S. company called EMTECH, a fintech startup dedicated to central banks. This partnership is for a digital transformation journey that will establish a template that other regulators and stakeholders can embrace for a robust banking sector. The partnership will leverage EMTECH’s software to test innovative solutions, including blockchain. The approach will bring onboard new products and services as well as bridge the gap between the banked and unbanked.

The project is also designed to speed up the time to market for the Bank of Ghana’s CBDC.

What is a Central Bank Digital Currency (CBDC)?

The Central bank digital currency is the digital form of a country’s fiat currency. The central bank of a country will issue electronic tokens whose value is backed by the full faith and the credit of the government which replaces the minting coins or the paper notes.

The supply of the Central bank digital currency will be wholly determined and controlled by the central government.

Can Ghanaians use the E-Cedi in other countries?

During the announcement on the piloting of the E-Cedi, Dr. Maxwell Opoku Afare said that as part of the preparations for the launch of the digital currency, there would be coordination between the Bank of Ghana and other central banks across the world, to enable Ghanaians use e-cedi for international transactions as well.

Is the E-Cedi Volatile?

Cryptocurrencies such as Bitcoin are characterized by a number of factors, including a lack of proper central bank regulation, that leads to its volatility.

According to Investopedia, cryptocurrencies are too unstable to play the function of money because they are not regulated by a state body or a recognized body within the state. They are managed by personal corporations and are subject to market volatility which makes them unfit to satisfy the usual capabilities of cash.

Unlike cryptocurrencies that experience high inflations, high profile losses and uncertainties of future values, the E-Cedi is expected to be less volatile because it will be backed by the state. If there are any market fluctuations, the central bank will step in and find a lasting solution to the instability in the market.
The importance of the E-Cedi

The E-Cedi will ensure financial inclusion in the Ghanaian economy. According to the Atlantic council Geotech Centre, digital money solutions like mobile money, will also be seen as a means to increase financial inclusion by pushing the government to include populations that are unbanked into the digital economy.

According to the Bank of England the digital currency can boost the gross domestic product (GDP) of a country up to three percent by lowering transaction costs associated with transfers and transactions. Additionally, the Bank of International Settlement has stated that it can improve liquidity by allowing faster transaction speeds.

Are other economies into CBDC?

Major world economies such as Brazil, China, the Eurozone, Japan, Russia, the United Kingdom, and the United States are undergoing various phases of research, exploration and trial of CBDCs.

AIBC News on June 6, 2021 reported that Ghana, therefore, surpasses many economies in the world in efforts to implement its own Central Bank Digital Currency, and has the lead on the African continent, with South Africa in the research stage since the beginning of the year.

China is almost done with its multi-million participants pilot with several other countries in Asia and Sweden in Europe, having made major advancements.


Central Bank Digital Currency (CBDC) is the way forward for the world’s economy when properly regulated to respond to global issues, such as the COVID-19 which took the world by surprise. The risks involved are far less compared to other unregulated digital currencies.

This report was produced under the Dubawa Student Fact-checking Project aimed at offering students in tertiary schools aspiring to take up roles in the profession the opportunity to acquire real-world experience through verification and fact-checking