Ghana to Launch e-Cedi in 2025 Following Years of Delays

Ghana is finally gearing up to launch its central bank digital currency (CBDC), the e-Cedi, in 2025 after years of delays. This move marks a significant step for the country as it seeks to modernize its financial system and improve access to digital payments. Ghana’s e-Cedi has been in development for several years, but the project faced setbacks, allowing Nigeria to take the lead in Africa by launching its own CBDC, the eNaira, over three years ago.

The Bank of Ghana (BoG) has now confirmed that it is ready to roll out the e-Cedi this year, pending approval from lawmakers. This announcement has reignited discussions about the potential benefits and challenges of CBDCs in Africa. While Nigeria’s eNaira was a groundbreaking project as Africa’s first CBDC, it has struggled to gain widespread adoption.

Less than 0.5% of Nigerians were using the eNaira within its first year, and by March 2024, it accounted for just 0.36% of the total money in circulation. Issues such as weak infrastructure, unreliable electricity, low trust in government systems, and concerns over financial crime have all contributed to its slow uptake.

Ghana hopes to avoid these challenges with a unique feature of its e-Cedi: offline functionality. This means that people will be able to use Ghana’s e-Cedi even without an Internet connection, which could be a game-changer for rural areas where Internet access is still limited.

According to Kwame Oppong, head of fintech and innovation at the Bank of Ghana, the goal is to make digital cash as easy and accessible as physical cash. This focus on offline usability could also help bring financial services to unbanked populations who have limited access to traditional banking systems.

However, not everyone is convinced about the need for CBDCs like Ghana’s e-Cedi. Some countries have abandoned their plans for digital currencies, arguing that existing payment systems are already efficient enough. Despite this skepticism, Ghana believes that an offline-capable CBDC offers distinct advantages over traditional instant payment systems because it doesn’t rely on Internet connectivity.

Unlike some other central banks experimenting with blockchain technology for their CBDCs, Ghana is taking a simpler approach with its e-Cedi. Initially, the digital currency will operate on a centralized system managed by the Bank of Ghana. However, there is room for future integration with blockchain-based systems if necessary. This cautious strategy allows Ghana to focus on getting the basics right before scaling up or adopting more complex technologies.

The global conversation around CBDCs also ties into broader debates about digital currencies and their role in modern finance. The Bank for International Settlements (BIS), a global financial institution that supports central banks, has expressed skepticism about stablecoins—digital currencies tied to traditional assets like fiat money. BIS head Agustín Carstens argues that as CBDCs like Ghana’s e-Cedi become more common and traditional payment systems improve, stablecoins may lose their relevance.

Critics of cryptocurrencies often point out that they are not as decentralized as they claim to be, with a few large players dominating the market. As more countries like Ghana launch their own CBDCs, the competition between traditional finance systems and cryptocurrencies is expected to intensify.

For now, all eyes are on Ghana as it prepares to launch the e-Cedi and reestablish itself as a leader in Africa’s digital currency race. By addressing issues like Internet accessibility and focusing on simplicity, Ghana hopes its e-Cedi will succeed where others have struggled. If successful, this initiative could pave the way for greater financial inclusion and set an example for other nations considering similar projects.

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