Ghana is set to launch its long-awaited central bank digital currency (CBDC), the e-Cedi, in 2025, pending approval from lawmakers. The Bank of Ghana (BoG), which was once at the forefront of Africa’s CBDC race, lost its early lead when Nigeria introduced the eNaira over three years ago. Now, after years of development, the country is ready to make its digital currency a reality.
Nigeria’s eNaira, Africa’s first CBDC, has struggled with adoption since its rollout. Despite initial optimism, usage remained low, with less than 0.5% of Nigerians adopting it within the first year. By March 2024, the eNaira accounted for only 0.36% of total money in circulation. Challenges such as weak digital infrastructure, unreliable electricity, low trust in government, and financial crime concerns have hindered its success.
Ghana aims to sidestep these obstacles by incorporating offline functionality into the e-Cedi, allowing transactions even without an internet connection. This feature could be a game-changer, particularly for rural communities with limited digital access. According to Kwame Oppong, BoG’s head of fintech and innovation, the goal is to make digital cash as convenient as physical cash, especially for the unbanked population.
The global debate on the necessity of CBDCs continues, with some countries abandoning their plans, arguing that existing payment systems are sufficient. However, Ghana insists that an offline-capable CBDC offers advantages over traditional instant payments, as it does not rely on internet connectivity.
Unlike other central banks exploring blockchain for their digital currencies, Ghana is opting for a more straightforward approach. The e-Cedi will initially run on a centralized system, with potential blockchain integration in the future if necessary. This phased strategy allows for a smoother rollout, avoiding the complexities of decentralized technology at the outset.
Meanwhile, the Bank for International Settlements (BIS) remains skeptical about stablecoins. BIS head Agustín Carstens has argued that as CBDCs expand and traditional payment systems improve, stablecoins could become obsolete. The institution has long criticized digital currencies, suggesting that cryptocurrencies are more centralized than they claim, with a handful of dominant players controlling the market.
As Ghana prepares to introduce the e-Cedi, the broader financial landscape is evolving. The competition between CBDCs, stablecoins, and traditional financial systems is intensifying, shaping the future of digital payments not only in Africa but across the globe.
