Deputy Governor of Ghana’s Central Bank Says CBDC is Fiat Money

Maxwell Opoku-Afari, the deputy governor of the Bank of Ghana(BOG), has equated central bank digital currency(CBDC) with fiat money. Maxwell Opoku-Afari, the deputy governor of the Bank of Ghana(BOG), has equated central bank digital currency(CBDC) with fiat money. The BOG official stated that a digital cedi would be on par with fiat money and it is working proof of the central bank’s need for digital payment and delivery of financial services. As per reports, Ghana's central bank is in the advanced phases of introducing a CBDC, making it one of the first African central institutions to take real-world measures to attain the goal.

Ghana's Central Bank Leads African Institutions in CBDC Testing

Earlier in June, the governor of Ghana’s central bank, Ernest Addison had revealed that the institution is “in the advanced stages” of introducing a CBDC or e-cedi. Addison emphasized Ghana’s ambition to lead the digital currency movement in the African continent and said the proposed currency would have to pass three stages before public adoption.

However, according to one local media outlet, the central bank’s first deputy governor has now shared that Ghana will conduct a pilot project with the digital cedi in September 2021.

In an address delivered after the opening session of a two-day event for journalists, Opoku-Afari said, “Digital currency is part of the central bank acknowledging the need for digital payment and digital delivery of financial services. By this, the Bank of Ghana will provide a platform on which we can add more value to digital transactions.”

He also added that the bank has taken its time to integrate “security features” into the CBDC and the pilot phase will help the institution learn valuable lessons before a digital currency is made public.

The Legitimacy of Digital Cedi Vs Fiat Money

Speaking on the comparisons drawn between CBDC and fiat currencies, Opoku-Affari stated, “The central bank’s digital currency is FIAT money, it is cash on its own so that the financial institution like banks and Fintechs will be able to create value addition on the digital cash.”

Previously, Addison had made similar assertions when he compared state-mandated digital currencies against private digital assets like Bitcoin.

Although many African banks have discussed the prospect of CBDCs with some working on various stages of their experiments. Ghana seems to be in the clear lead if it adheres to the proposed timeline.

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Deputy Governor of Ghana’s Central Bank Says CBDC is Fiat Money

Divya Mathur

Divya is a postgraduate from Jawaharlal Nehru University specializing in International Relations and a professional writer with more than 5 years of experience writing for the web. She is an avid reader interested in the global financial system and the effects of decentralization. At Cryptoknowmics, she hopes to deliver clear and understandable content to inform readers about the latest events in the crypto sector.