Ghana to launch CBDC, the eCedi in 2025 — Report

The Bank of Ghana (BoG) is set to roll out the retail version of its central bank digital currency (CBDC), the eCedi, by the end of 2025.

This follows a two-year delay despite a successful pilot program. 

Driving the news

• Kwame Oppong, Head of Fintech and Innovation at the BoG, said the launch of the eCedi depends on the passage of a legislative act, as outlined in a report by its technology partner, Giesecke+Devrient.
• According to Oppong, the BoG prioritized offline access to the eCedi to reach remote communities and promote financial inclusion.
• The bank wants to integrate offline payments technology such as point-of-sale and near-field communications into the eCedi’s makeup to enable Ghanaians use it without internet access. 

The report details

• A report by Giesecke+Devrient and the Official Monetary and Financial Institutions Forum (OMFIF) presents findings from a global survey of central banks on CBDCs.
•  While half of the survey respondents plan to issue a CBDC within five years, a third have postponed their timelines due to economic conditions and political considerations.
• Nearly all respondents have conducted feasibility studies on CBDC issuance, with 81% anticipating a launch in the near future.
• Central banks in emerging markets, particularly in Africa, plan to issue a CBDC within one to two years, while those in developed countries are targeting a longer timeline of three to five years.
• In addition, the survey found that financial inclusion was the major motivation for creating a CBDC for countries in emerging markets, including Ghana. 

Zoom in 

• For the eCedi, a key priority in its launch strategy was ensuring it could be used for offline payments. 
• With 47% of Ghanaians lacking internet access, a CBDC without offline functionality would exclude nearly half the population and undermine financial inclusion efforts.
• Oppong, speaking at a conference in January 2024, said the eCedi is designed to work beyond the last mile of cell connectivity. 
• He emphasized that to ensure true inclusivity, the BoG prioritized making the eCedi functional offline.

Key quote

• Kwame Oppong said: 

“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. We wanted to create an instrument that allows people to live off-grid and use it as they would use cash.” 

Zoom out 

• Central bank digital currencies (CBDCs), often seen as digital equivalents of national fiat currencies, have gained prominence in recent years.
• Nigeria was the first African country and only the second in the world to launch a CBDC when it commissioned the eNaira for use in 2021, albeit with little success recorded since. 
• In 2023, Zimbabwe launched a gold-backed digital currency to stabilize its hyperinflated local currency and provide an alternative store of value.
• The Bank of Ghana, on the other hand, announced plans to develop the eCedi in 2021 and began testing an offline version later that year in Sefwi Asaafo, a small town in the country’s southwest. 
• The governor of the BoG, Ernest Addison, said in 2023 that the bank had concluded a successful pilot of the eCedi but was choosing to hold off on the launch due to a ‘dislocation’ of the economy.