Ghana’s central bank backs CBDCs for financial inclusion

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Ghana’s central bank will continue to explore its central bank digital currency (CBDC) as it seeks to boost financial inclusion in the country, a top official at the central bank recently stated.

Ghana has been one of the most advanced countries in Africa in CBDC exploration and has already been conducting live pilots across the country. The West African country is taking after its neighbor Nigeria which launched its eNaira last year, although it hasn’t been the success the Central Bank of Nigeria (CBN) projected it would be.

In a recent interview during the Africa Money & DeFi Summit, Kwame Oppong touted the benefits of a CBDC, including boosting financial inclusion, which is key for the Bank of Ghana.

Live on the main stage: Stablecoin, crypto & CBDC, Risks and opportunities for Ghana featuring @CarmelleCadet, Founder @emtech_inc, Kwame Oppong, Head of Fintech & Innovation, @thebankofghana and Viv Diwakar, Director of Technology @HBAR_foundation #AMDSGH pic.twitter.com/EytJfdxuxq

— Africa Money & DeFi Summit (@AfricaMoneyDefi) September 27, 2022

“I think in terms of CBDC, our goal is to be able to finish testing it. We’ve seen the results. We’re going to look at the study each and every time in the future. But our real reason for doing it is more financial inclusion,” Oppong, Director of Fintech and Innovation at Bank of Ghana and the lead of the eCedi Project, stated.

Already, the bank is conducting pilot tests for the eCedi in several regions in Ghana. In Sefwi Asafo, a small town in southwestern Ghana, the bank has been testing offline eCedi payments, targeting Ghanaians who have no access to the Internet. This pilot has been a success, Oppong revealed and has incorporated several merchants who now accept instant eCedi payments for goods and services.

In addition to financial inclusion, the eCedi will also unlock new credit opportunities for Ghanaians, Oppong added. Most Ghanaians currently rely on cash payments, making it almost impossible for financial institutions to gauge their creditworthiness. By turning to eCedi payments, they will be able to generate data that banks can then rely on to better evaluate them and open up new credit opportunities.

Ghana’s neighbor Nigeria has been setting the pace in CBDC development, launching the eNaira in October last year. However, the adoption has been underwhelming, leading the Central Bank of Nigeria to measures such as slashing eNaira merchant service charges by 50% and introducing USSD applications for feature phone users.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch: The BSV Global Blockchain Convention panel, Blockchain in Africa