In 2022 Ghana began piloting a retail central bank digital currency, exploring both an online and an offline version of the so-called eCedi. The Bank of Ghana's Maxwell Opoku-Afari ran through the findings at last week's Payments Canada Summit.
Ghana has been aggressively pursuing a financial sector digitisation programme for several years as it seeks to boost financial inclusion and wider economic growth.
When it came to designing the eCedi project, the bank 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, first deputy governor Opoku-Afari says that any currency has to work for all Ghanaians, no matter where they are located. And, while Ghana has seen the percentage of people with formal bank accounts sore in the last decade, nearly a third of the population is still unbanked.
The bank also opted for a token-based, rather than account-based, system - minting the eCedi and 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, was chosen because the "goal was to enable the ecosystem," says Opoku-Afari.
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 and concentrated on merchant payments and was run purely by the Bank without commercial players. The reasons for the focus on merchant payments, says Opoku-Afari, is that, as of 2017, 99% of these transactions were still carried out in cash.
Opoku-Afari says that the 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 found a significant percentage of participants were, based on their experience of using it, positive about the system.
Opoku-Afari is enthusiastic about the potential for an eCedi to boost financial inclusion in rural areas because it helps create a transaction history that commercial players can then use - with consent - to begin offering products themselves.
The first deputy governor quotes a Barclays executive as saying: "The central bank is really carving out a path that the bank can walk in and develop more business for themselves."
Offering some lessons from Ghana's experience, Opoku-Afari says that central banks must remember that the CBDC is a currency first and foremost, not a wallet for channel; that you must have a human-centred design; that you must design for your country's context; and must be aware that the process is resource intensive.
He also stresses 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 alludes 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."