BoG Deputy Governor speaks on eCedi pilot

The Bank of Ghana’s First Deputy Governor, Dr. Maxwell Opoku-Afari has disclosed reasons for BoG’s eCedi pilot at Payments Canada Summit 2023.

In 2022, Ghana began piloting a retail central bank digital currency (CBDC), exploring both an online and an offline version of the eCedi. The country has been aggressively pursuing a financial sector digitization programme for several years as it seeks to boost financial inclusion and wider economic growth.

When it came to designing the eCedi project, BoG decided to carry out pilots in three locations: the capital of Accra, the town of Tarkwa, and the village of Sefwi Asafo. While the first two locations explored several use cases for online payments, Sefwi Asafo saw the offline experiment.

Explaining the importance of exploring an offline CBDC, Dr. Opoku-Afari noted that any currency has to work for all Ghanaians, no matter where they are located, adding that “while Ghana has seen the percentage of people with formal bank accounts soar in the last decade, nearly a third of the population is still unbanked.”

According to the deputy governor, the Central bank also opted for a token-based, rather than account-based, system minting the eCedi, then distributing it via commercial players – one mobile money provider, two banks and two PSPs.

This approach, rather the use of a central bank app, he said, was chosen because the “goal was to enable the ecosystem.”

“The online pilots saw participants use existing banking apps and involved P2P, wallet-to-bank, and merchant and bill payments. In contrast, the offline experiment saw the eCedi distributed via smart card, concentrated on merchant payments and was run purely by the Bank without commercial players. The reasons for the focus on merchant payments is that as of 2017, 99% of these transactions were still carried out in cash.”

Encourages Implementation Of CBDC

According to Dr. Opoku-Afari, the Central Bank wanted to test three things: can the currency work for consecutive offline payments; will the target users be able to use it; and will they want to use it.

The Bank, he said, found a significant percentage of participants whom based on their experience of using it, were positive about the system.

The first deputy governor quoted a Barclays executive saying: “The central bank is really carving out a path that the bank can walk in and develop more business for themselves.”

“Central banks must remember that the CBDC is a currency first and foremost, not a wallet for channel; that you must have a human-centered design; that you must design for your country’s context; and must be aware that the process is resource intensive.”

He also stressed on the importance of testing: “Nigeria went straight to CBDC implementation. And I love them for doing that – but we can’t do that!”

As for next steps, Opoku-Afari alluded to Ghana’s current economic difficulties and engagement with the IMF but says that the eCedi is still “one of the things that we intend addressing and focusing on. So it is still an ongoing effort.”