Offline payments possible with e-cedi


Ghana strives to offer its central bank digital currency (CBDC) to citizens without an internet connection. The Bank of Ghana has revealed that the bank is working on a pilot project to test the viability of offline payments as it seeks to target a wider population in line with its stated goal of scaling up financial inclusion across the board. the economy.

Ghana has already become one of the pioneers in Africa when it comes to the bold new world of CBDCs in Africa. Its e-cedi project, which is now in its pilot phase – used by potential clients selected from a sandbox-type experimental base to assess its effectiveness and identify possible operational challenges – is the most advanced CBDC project in Africa. alongside its neighbor Nigeria, which is expected to launch its e-naira at the end of this month.

This gives Nigeria a slight lead in timelines for introducing its digital currency, but Ghana’s plans for using its e cedi are more extensive than its neighbor who has not announced plans to return. its own version that can be used offline. Most importantly, the two countries collaborate rather than compete with each other; The first deputy governor of the BoG, Dr Maxwell Afari-Opoku, has previously revealed that negotiations are underway between the central banks of the two countries to execute trade finance and financial transfer agreements using their respective digital currencies by “The back door”.

The Bank of Ghana (BoG) seeks to offer digital currency to as many Ghanaians as possible. As such, the bank is studying how to make e-cedi available offline, a senior official revealed.

According to a report by Hootsuite and WeAreSocial, there are 41.7 million mobile connections in the country with a population of just under 32 million, a ratio of 133%. However, only around 15.7 million are connected to the Internet, just over half of the total population. Although this number has increased by more than 6% in the past year, internet penetration is still far from universal in the country.

The BoG wants to offer e-cedi to half of the population who is not connected to the Internet, revealed recently Kwame Oppong, the head of fintech and innovation of the bank.

Speaking at the Ghana Economic Forum, Oppong said: “Financial inclusion is limited by the availability of connectivity and electricity. What we hope to be able to do, and we are one of the pioneers in this field, is that the e-cedi would also be able to be used in an offline environment thanks to certain smart cards.

Offline access for CBDCs is an area that many central banks have explored as they seek to deliver digital currencies to the millions of people who are not connected to the internet. This segment of the population is one of the biggest targets for CBDC deployment, with financial inclusion being one of the biggest benefits of a CBDC. But while that means Ghana isn’t exactly innovative, the BoG is the pioneer in Africa when it comes to floating a digital currency that can be used offline as well as online.

China has explored the use of its digital yuan for offline users. The Bahamas has also made major strides in this area, with its Sand Dollar designed as a “foolproof solution to all-too-common natural disasters that could disrupt internet connectivity in the island nation.” In February, the bank launched the world’s first CBDC-linked debit card.

In Ghana, the use of loaded cards is already becoming quite common, with most commercial banks launching their own respective versions of locally used debit cards, in addition to serving as sellers of internationally accepted cards such as MasterCard and Visa Card.

But more importantly, Ghanaians have embraced the use of smartphones for mobile money transactions, which is now the most popular mode for executing financial transactions, even at the local level.

All of this suggests that Ghanaians will be ready to embrace an innovative new payment method such as a card that value can be loaded onto. The fact that the currency is ultimately backed by the BoG itself rather than a commercial bank will make it all the more attractive following the collapse of the financial services industry that occurred between 2017 and 2019. .

However, as central banks pursue offline CBDC payments, a Visa research paper warned that “without finding a secure solution, CBDCs could open up to digital counterfeiting.” The global credit card giant proposed the offline payment system protocol that would prevent double spending by relying on digital signatures generated in trusted execution environments available on smartphones, even offline.

For the BoG, the main persuasion is the desire to keep its citizens away from trading in cryptocurrencies which, due to their volatility, have significant profit potential but equally significant downside risk.

More importantly, the larger the cryptocurrency investments made in Ghana, the less control the BoG has over the money supply and, therefore, over the impact of its monetary policy.

Indeed, the BoG has actively resisted the adoption of cryptocurrencies since they became popular around the world. As early as January 2019, he published a public notice warning against such activity. It said:

The Bank of Ghana has taken note of recent developments in the use, holding and trading of virtual or digital currencies (also known as cryptocurrencies), such as Bitcoin in Ghana. The Bank of Ghana wishes to inform the general public that such digital currency activities are currently not permitted under the Payments System Act 2003 (Act 662). The Bank of Ghana is currently investing significant resources to further improve the payment and settlement system. , including digital forms of money and also to introduce cybersecurity guidelines to protect electronic and online financial transactions. A revised payment system law, known as the Payment Systems and Services Bill, will be considered by Parliament in the coming months.

This review is expected to bring the electronic payments space up to international standards and in line with the changing landscape of electronic payments. As the Bank of Ghana recognizes the enormous potential of blockchain technology and how it can dramatically transform the payment system landscape and promote financial inclusion, we are evaluating with stakeholders and other international partners how the use subsequent blockchain technology in digital currencies would fit into the global architecture of finance and payments.

The public is therefore strongly encouraged to only do business with institutions approved by the Bank of Ghana to ensure that these transactions fall within our regulatory jurisdiction. For the avoidance of doubt, the public can always check our website ( for a list of licensed banks and non-bank financial institutions in Ghana. The Bank of Ghana assures the general public of its continued efforts to preserve the stability and soundness of the financial sector.

Instructively, these regulations have since been introduced, but without creating legal space for the trading and use of cryptocurrencies as a form of payment in Ghana. However, the Bank is ready to embrace innovation when it comes to financial products and services that use the underlying blockchain technology.

Indeed, BOG recently partnered with Emtech – a digital transformation consortium – to launch a sandbox targeting blockchain, central bank digital currencies (CBDCs) and financial inclusion.

The BoG subsequently launched a pilot fintech regulation and innovation live test that will focus on projects using blockchain technology.

According to the bank, the sandbox will cover a wide range of innovations in the financial services sector, targeting women and improving financial inclusion in the country. The bank is looking for money transfer products, crowdfunding products and services, e-KYC (electronic know your customer) platforms and new merchant payment solutions for small and medium-sized businesses.

The sandbox will be available to banks, specialized depositories and payment service providers, including dedicated e-money issuers as well as unregulated entities.

Subsequently, EMTECH launched a compliance platform in partnership with Microsoft that allows central banks to resolve compliance issues or securely test their central bank digital currencies (CBDCs).

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