BoG Governor explains why bitcoin is an unattractive means of payment in Ghana

Dr Ernest Addison 480x430 1121212 Dr. Ernest Addison is Governor of Bank of Ghana

Fri, 27 May 2022 Source: www.ghanaweb.com

Crypto currencies are highly volatile

Crypto assets remain essentially speculative, BoG

Decrease in the use of bank notes influencing issuance of CBDC, Governor

Governor of the Bank of Ghana Dr. Ernest Addison has explained the reason bitcoin and other crypto assets are not attractive as a means of transaction in Ghana.

He indicated that cryptocurrencies are highly volatile and appeal to mainly smaller units of investors.

The Governor made these statements during a keynote address at the Institute of Chartered Accountants Ghana’s event.

“Despite the excitements that surrounded its adoption and potentially a replica for central bank fiat currency, high price volatility makes crypto-assets such as bitcoin unattractive as a means of payment. Crypto assets continue to remain essentially speculative and attractive to smaller units of investors.

“The use of any privately issued form of currency generally lacks a strong consumer-base needed to create the network externalities which is capable of dethroning a fiat currency or legal tender.”

He also stated that “despite several recommendations by academia and industry watchers for Central Banks to leverage on existing and newer technologies to issue digital currencies as alternatives to banknotes, few countries have actually introduced CBDC with most countries in exploration stages.

The rapid decrease in the use of banknotes and coins coupled with a less fully developed infrastructure to support the issuance of banknotes have invigorated interest in policymakers and financial sector authorities in the introduction of CBDC.”

He further noted that the increasing participation of non-bank financial institutions in the Ghanaian payment and financial ecosystem can be attributed to the rapid adoption of digital financial technology, technological innovations, increasing interconnectedness among payment service providers and banks, and the existence of an enabling regulatory environment.

Dr. Addison further noted that the participation of these entities in offering exciting digital technologies to meet customers’ derived demand for safe, convenient, and reliable digital financial products and services are overwhelming.

Source: www.ghanaweb.com
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