Ernest Addison, the governor of Ghana's central bank said on Tuesday said that the government might give a nod for a digital version of national fiat cedi issued by the central bank in the near future. Addison's comment came during Ghana’s Annual Banking Conference, where the governor noted that they are already in talks for a pilot sandbox project.
The governor during the conference also mentioned the rapid digitization in Ghana where mobile banking has increased by 70% from 2017 to 2018. He believed that in order to keep up with emerging technologies and growing demand for a digitized economy he has approved the digital version of their national fiat which will function as a stable coin and will be backed by a 1:1 ratio of the cedi in reserves. The Central Bank Issued Digital Currency (CBDC) can be stored in digital wallets.
However, the governor also mentioned that their national digital currency will be different from the typical cryptocurrency definition. As per a report in the local daily, Addison explained that the CBDC will be just a digital representation of the cedi stored in reserves and won't be a new form of currency based on DLT. He said,
“It is just electronic money backed by currency, So [the central bank] cannot create money; they are only having an electronic representation of the cedi that the Bank of Ghana puts into circulation. So it is not crypto.”
However, the governor was not clear on which technology the digital fiat will be based on if not blockchain.
The growing popularity of CBDC and stable coins
2019 has seen many events unfold surrounding stablecoins, where Libra announced its multiple fiats backed universal stable coin, China who has been working on their CBDC for years reportedly is nearing completion and slated to become the first country to do so.
Apart from China many other EU nations, as well as other countries, are working on launching a digital version of digital fiat where some are using blockchain as the underneath tech while a few are using hybrid systems as well. All in all stablecoins were the talk of the crypto town throughout 2019.