Ghana is preparing to launch its central bank digital currency, the e-Cedi, focusing on offline capabilities to better serve unbanked populations. The Bank for International Settlements (BIS) questions the role of stablecoins as CBDCs become more prevalent, asserting that improved payment systems could fulfill market demand more robustly. Overall, the evolution of digital currencies could challenge the relevance of existing decentralized alternatives.
Ghana has been developing its central bank digital currency (CBDC), the e-Cedi, for over five years, aiming to catch up with Nigeria’s earlier eNaira launch. The Bank of Ghana (BoG) is now prepared to introduce the e-Cedi in 2023, pending legislative approval to legalize the currency. Ghana’s emphasis on offline functionality seeks to serve unbanked populations, particularly in remote areas with limited internet access, where the e-Cedi could function like cash for off-grid users.
The BoG has collaborated with the German tech firm Giesecke+Devrient (G+D) to utilize their CBDC platform, Filia, which has also been applied in countries like Singapore and Brazil. Kwame Oppong, the fintech and innovation head at BoG, highlighted that offering digital payments without requiring constant internet connectivity sets the e-Cedi apart from other digital systems. While prioritizing a centralized model for the initial phase, he acknowledged that future interoperability with decentralized technology is being considered.
In a related context, Agustín Carstens, the general manager of the Bank for International Settlements (BIS), has posed critical questions regarding the relevance of stablecoins as CBDCs develop. Carstens asserts that improved traditional payment systems and advanced wholesale central bank currencies could fulfill digital asset demand more effectively, suggesting that stablecoins, essentially tied to currency reserves, may become obsolete with the rise of CBDCs.
Carstens’s remarks echo previous criticisms made by BIS regarding the supposed decentralization of digital currencies, which he argues still rely heavily on centralized intermediaries. He advocates for advancing real central bank digital solutions to address market needs and curb the growing demand for stablecoins. The BIS believes that the evolution of payment systems should create a more robust financial framework without relying on alternatives like cryptocurrencies.
Ghana is on the cusp of introducing its e-Cedi, focusing on offline functionality to enhance accessibility for unbanked individuals. This move is positioned alongside growing critiques from the BIS on the viability of stablecoins in the face of emerging CBDCs, highlighting a significant shift in the digital currency landscape. As central banks evolve their digital currency strategies, the financial ecosystem is likely to change, potentially phasing out current alternatives like stablecoins.
Original Source: coingeek.com
