As further evidence of its commitment to ensuring that the impending central bank digital currency, the e-cedi, will fulfil its role as a driver of financial inclusion, the Bank of Ghana (BoG) has assured that the currency will be equipped with offline capabilities for areas with limited connectivity and availability of payment platforms.

This was disclosed by Head of Fintech and Innovation at BoG, Kwame A. Oppong, while speaking on the theme ‘Digitalisation of the Ghanaian Economy: e-Currency, electronic payment systems; critical vehicle to promoting economic growth and development’ as a panellist at the 10th edition of the Ghana Economic Forum (GEF 2021) organised by the B&FT.

According to him, the move will ensure nationwide adoption and usability of the digital currency, and will make use of measures such as smartcards.

“We have endeavoured to go to the next step to ensure that our brothers and sisters in frontier-type regions are able to access the Central Bank Digital Currency (CBDC) and conduct transactions where there are limited payment services.

“I mean, financial inclusion is limited by the availability of connectivity. So what we are doing, and we are one of the people pioneering this, is the e-cedi will actually be able to be used in an offline environment through some smartcards,” he said.

Concerns surrounding the safety of CBDCs’ offline usage have been top of the agenda for central banks globally, with the general consensus being that CBDCs should be accessible offline for them to be successful.

But, Mr. Oppong said, they must be resilient and secure enough to protect against cyber-threats and the risk of digital counterfeiting, fraud, other types of cybersecurity risk and criminal exploitation.

Addressing concerns about security, particularly in an offline environment, Mr. Oppong stated that the regulator is cognisant of these challenges,which informed its decision to adopt the value-based retail approach to the digital version of the nation’s fiat currency.

He added that the decision was made ‘by design’ and comes amid a slew of regulatory frameworks introduced by the BoG and its stakeholders to protect consumers.

Explaining, he said: “Our choice in adopting the value-based CBDC was one of the first layers from a security standpoint. Today, there is already a cybersecurity directive; there’s a payment law that has so many requirements in terms of security for consumers and consumer protection laws. These were all crafted to save consumers from fraud and to protect them from abuse. When you deploy a CBDC under these conditions, the measures put in place begin to apply.”

He added, however, that as the CBDC has translates from the conceptual to the pilot stage, the BoG is placing emphasis on consumer education – noting that no matter how sophisticated a system is, if people are not properly trained or clear in their minds how to use it, it is bound to be exploited.

“We are targetting the urban, peri-urban and frontier regions, and whatever has been learned will be implemented to secure consumers at a system level, operational level and personal level.”

The adoption of CBDCs is gaining traction, with the International Monetary Fund (IMF) indicating recently that at least 110 central banks are at various stages of developing their digital currencies

Credit: B&FT online

( By Ebenezer Chike Adjei NJOKU)