Five years ago, Ghana Was among the Frontrunnarna in Africa’s Central Bank Digital Currency (CBDC) race, with its digital currency research more advanced than most nations. But it has since fallen behind its neighbor Nigeriawhose anira was launched over three years ago. Bank of Ghana (BOG) now intends to introduce its CBDC this year.
At the same time, the head of the bank for international settlements (BIS) has continued its attack on digital assets, this time says that Stablecoins will be discontinued by CBDCs and improved digital payments.
Ghana ready to start CBDC
Ghana’s e-cedi has been under development for over five years. The top bank has worked with Germany’s technical companies Giesecke+Devriment (G+D) and tested various payment scenarios on the company’s CBDC platform Filia, which other countries like SingaporeThe Thailand and Brazil Have also used.
Kwame Oppong, who is the head of fintech and innovation at The Bog, now says that the bank is ready to launch Ecedi this year. However, whether legislators adopt a new law that legalizes the digital currency depends.
Oppong’s views were included in a new CBDC Report of G+D, who found that 72% of central banks expect to issue a digital currency, with 48% planning to issue one within the next five years.
The report revealed that Ghana has prioritized offline functionality with Ecedi to better serve marginalized residents living in distant areas.
“It was an important function for us to deliver because there is currently no commercial solution that allows digital money to work in an offline environment,” revealed Oppong.
The central bank man said so Offline payments Is no longer a challenge and noted that this technology “has existed since the 1990s, but the challenge was to ensure that the requirement for frequent re-connection and if synchronization was not obstructive.”
Offline access will be crucial to the success of Ecedi. While mobile connection in Ghana is over 100%, Internet connection stands at about 70%. Ghanaians without access to the Internet are mainly found in the countryside and stands for the highest uninhabited figures, making them the intended goal for CBDC.
“We wanted to create an instrument that allows people to live outside the network and use it as they would use cash,” pronounced Oppong.
Globally, the debate about whether retail CBDC is needed to be raging. In some countries, central banks have assumed that existing immediate payment systems (IPS) are adequate for their citizens and abandoned CBDC projects.
According to Oppong, however, it makes it better to provide a CBDC -offline functionality than these systems, which are almost exclusively available via the Internet.
“Yes, IPS offers benefits, but when you think about how payments develop, we believe that those who move to an IPS will now move to a CBDC later anyway, so we might as well go straight there,” he said.
While some central banks have investigated DLT for their CBDCs, Ghana will avoid decentralized technology, at least in the initial phase, revealed Oppong. Bog chose a centralized model, but Ecedi will be flexible to enable interoperability with DLT systems.
Can CBDC make Stablecoin outdated?
Somewhere else has the head of BIS questioned need for stablecoins In light of CBDCs and improved payment rails.
Following one of the panels at the Chapultepec Conference in Mexico City, BIS Manager of Manager Wagons abandoned The fact that most of the demand for digital assets is due to the slow development of traditional payment systems.
“For example, if we had a wholesale center bank money or spare currency, technically advanced, do you think it could compensate for the demand for Stablecoins?” he asked panel participants Christine ParlorProfessor at UC Berkeley’s Haas School of Business.
Carstens added that since Stablecoins is supported by cash and central bank funds, the financial industry “should” concentrate more on doing the “real thing” in order to be technically represented in such a way that the space that Stablecoins or Crypto fills would be filled in a more solid manner. “
This is not the first time BIS has blown digital currency. In a 2023 ReportIt struggled into the perceived decentralization ethos under which digital currency claims to work.
“The sector acts under the banner of decentralization, but in practice new Centralized intermediaries Has played a key role in channeling funds for the cryptounset and intermediate products within the reported report.
Watch: CBDCs are more than just digital money
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