Ghana is ready to launch its e-Cedi CBDC this year, having collaborated with Giesecke+Devrient. Offline functionality is emphasized to reach the unbanked populations, particularly in remote areas. Meanwhile, the BIS argues CBDCs may render stablecoins obsolete as the demand for digital assets increases due to deficiencies in traditional payment systems.
Ghana, once a leader in Africa’s central bank digital currency (CBDC) initiative, is set to launch its e-Cedi this year after falling behind Nigeria’s eNaira, which was launched over three years ago. The Bank of Ghana (BoG) has collaborated with Germany’s Giesecke+Devrient to develop the e-Cedi, focusing on various payment scenarios that leverage the firm’s platform.
Kwame Oppong of the BoG has confirmed the bank’s readiness for the e-Cedi’s launch, contingent on lawmakers’ approval of a new legal framework. A recent report by G+D indicated that 72% of central banks plan to issue a digital currency, with nearly half intending to do so within five years.
Significantly, Ghana emphasizes offline functionality for the e-Cedi, aiming to cater to unbanked individuals in remote areas. Oppong stated, “It was an important feature for us to deliver because, at present, there is no commercial solution that allows for digital money to function in an offline environment.” The initiative primarily targets individuals in rural areas lacking reliable internet access.
To compete with Internet-based payment systems, the e-Cedi will integrate offline capabilities, allowing for cash-like usage in off-grid circumstances. While BoG intends to use a centralized model initially, it has allowed for potential interoperability with decentralized technologies in the future.
Meanwhile, Agustín Carstens, General Manager of the Bank for International Settlements (BIS), criticized the ongoing relevance of stablecoins amid the rise of CBDCs. He posited that improved traditional payment systems could render stablecoins obsolete. He emphasized that the demand for such digital assets arises from the inefficiencies of current payment processes.
In a discussion at the Chapultepec Conference, Carstens urged the financial industry to focus on enhancing central bank capabilities rather than relying on digital currencies. He argued, “If we had, for example, a wholesale central bank money… do you think that could make up for the demand for stablecoins?” He suggested that making traditional financial systems more efficient could satisfy the need currently met by stablecoins.
The BIS’s critical stance on digital currencies reiterates its skepticism toward decentralization, noting that centralized intermediaries have still a significant influence within the crypto ecosystem. The BIS emphasizes the importance of developing robust monetary frameworks over reliance on newer, digital asset forms.
The launch of Ghana’s e-Cedi aims to enhance financial inclusion by focusing on offline capabilities, catering especially to the unbanked population. The ongoing discourse regarding stablecoins’ future highlights the need for improved payment infrastructure. As central banks like the BIS advocate for a more solid financial approach, the evolution of CBDCs may signify a pivotal shift in digital currency reliance. Ultimately, Ghana’s proactive stance in developing its CBDC could reevaluate its position in the digitized global financial landscape.
Original Source: coingeek.com
