Gov. Ernest Addison of the Bank of Ghana (BOG) said the agency is now “in the advanced stages” of creating a digital currency and warned against “unregulated” cryptocurrencies.
“I believe there is a greater focus on looking at digital money that is backed by the government and central banks.
Addison stated during a press conference that private forms of money “actually aren’t able to serve the tasks of money efficiently.”
The West African country is moving closer to issuing the digital cedi, but according to Addison, the process must be broken down into three stages in order for BOG to preserve its position as Africa’s leader in adopting modern financial technologies.
“With these kind of things, you have to do it in steps, and the first part was really focused on the design of the electronic money, and now the team that has gotten very far in the design phase is looking at the implementation phase,” Addison explained. The next step will be a pilot phase, during which “a small number of people will be able to utilize the digital cedi on mobile applications,” he explained.
He said that the Bank of Ghana was one of the first African central banks to announce that it was developing a digital currency.
During a press conference, Addison also stated that unregulated cryptocurrencies such as bitcoin are “too volatile to serve as money.”
BOG and Emtech, a digital transformation consortium, recently announced the development of a sandbox focused on blockchain, central bank digital currencies (CBDCs), and financial inclusion.
In smaller areas, serious conversations concerning CBDCs have started gaining traction. The Eastern Caribbean Central Bank (ECCB) introduced DCash, and the Central Bank of the Bahamas introduced the Sand Dollar, a digital currency backed by the central bank of that country.
Disintermediation, greater costs, deposit funding volatility, and challenges to financial anonymity are among risks associated with the development and deployment of CBDCs. China has already proposed global guidelines on how CBDCs should operate.