Ghana is working on a digital currency and could issue one in the near future. The Bank of Ghana has been in talks with some of the stakeholders in the finance industry regarding the move, the bank revealed recently.
The governor of the bank, Ernest Addison revealed during a recent event that the regulator intends on developing a pilot project in a sandbox environment in the near future. Speaking during Ghana’s Annual Banking Conference, Addison stated, “The digital age provides enormous potential for the financial sector to re-orient itself to satisfy the new consumer and business demands for financial services.”
The digital currency will complement recent growth in mobile money in the West African country, Addison added. Mobile money has been on a steady rise as more Ghanaians seek to move into cashless payment methods. In 2018, mobile money transaction volumes grew to 1.4 billion Ghanaian cedi ($250 million), up from 982 million cedi ($176 million) the previous year.
The digital currency will also help the country in its push towards financial inclusion and could help push the banked population higher. As it stands, the banked population stands at 62% for men, with women and those living in rural areas registering a significantly lower number.
A day before he announced the digital currency initiative, the governor instructed the central bank to issue mobile money backed in a 1:1 ratio by the cedi. According to a report by local news outlet MyJoyOnline, the central bank is working on the project with GCB Bank, the largest in the country. Addison clarified that the mobile money will not be cryptocurrencies, but didn’t reveal any other details on how it will be minted or distributed.
Ghana isn’t the first African country to explore a state-backed digital currency. In May this year, the South African Reserve Bank revealed that it was exploring the possibility of issuing a digital currency backed by the rand. The bank revealed that it had been conducting research on digital currency since 2016. The currency would be for domestic use only and would be issued exclusively by the bank.
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