3

BoG’s digital currency agenda underway

Fri, 5 Jun 2020 Source: Goldstreet Business

The Bank of Ghana has confirmed to the financial sector that its agenda on digital currency is underway, as it looks to establish a sandbox that will promote innovation in the financial technology (FinTech) market.

This has become imperative in the wake of COVID-19, which has brought radical changes, whereby digital means of payment has become the best option for consummating financial transactions.

Speaking at a virtual stakeholder workshop on the Payment Systems and Service Act, 2019 (ACT 987) earlier this week, the First Deputy Governor of the BoG, Dr. Maxwell Opoku-Afari said, “We’re still actively working on establishing a Sandbox to promote innovation in the market, and test concepts such as a Central Bank Digital Currency (CBDC).”

This regulatory sandbox-based approach has been adopted by central banks across the world in order to ensure oversight regulation and protection of consumer interests.

The regulatory sandbox allows authorized businesses to test their innovative products, services, business models and delivery mechanisms in the real market, with real consumers, on a trial basis.

However, no timeline has been announced for executing the planned sand box trial run, as at yet.

Market experts have expressed the importance of this development as it will help reduce the time to market at low cost, improves access to capital, and ensure adherence to compliance requirements.

The testing of a central bank digital currency concept, also called digital fiat currency or digital base money, will act like a digital representation of the country’s fiat currency, and will be backed by a suitable amount of monetary reserves like gold or forex.

CBDC is specifically designed to bring about the best of both worlds – the convenience and security of digital form like cryptocurrencies, and the regulated, reserved-backed money circulation of the traditional banking system.

Dr. Afari also noted that the central bank will evolve itself in response to the dynamic nature of the sector.

To this end, in the past months, as a further commitment to promote FinTech, the BoG has established the FinTech and Innovation office to supervise and promote the activities of FinTechs in Ghana.

Source: Goldstreet Business

Send your news stories to and features to . Chat with us via WhatsApp on +233 55 2699 625.

Related Articles: