E-Cedi sets the pace for subsequent digital currencies' development and adoption.
In Ghana, the executive director of eTranzact, George Babafemi, has urged caution among youth interested in cryptocurrency, suggesting they exercise patience for the Central Bank Digital Currency (CBDC) rollout, which the Bank of Ghana (BoG) plans to release first. This move, according to Babafemi, is crucial to set guidelines and manage risks within the digital currency space.
Babafemi acknowledges that crypto is a non-regulated investment instrument and carries inherent risks, making it advisable to await the full implementation of the CBDC. Despite its border limitations compared to cryptocurrencies, the eCedi, as the CBDC is known, will operate in a similar format and be safer due to the recognized issuer.
Best practices imply transitioning from known territories to lesser-known spaces, and applying this principle to the digital currency realm could help address unexpected challenges of risk and fraud. Babafemi strongly advocates for a regulated financial system and encourages patience until the eCedi's rollout, as it will serve as a basis for regulating cryptocurrency instead of moving from the unknown to the known.
Moreover, Babafemi believes that every government is responsible for its country's economic policies, thus desiring control over the fiscal space. While he does not advocate for an outright ban on cryptos, he advises potential investors to remain patient until the eCedi launch. Babafemi shared these views during an entrepreneurship conference on the theme 'Cryptocurrencies in Africa, opportunities, and implications for Ghana', organized by the Chamber of Commerce and Industry (CCI) France Ghana.
Recent statements by the First Deputy Governor of BoG indicate that the eCedi pilot will be initiated by the end of this year within a regulatory and innovation sandbox. This environment allows firms to test innovative products, services, and business models under a regulator's supervision. The eCedi is set to be a digital representation of the nation's fiat currency, backed by monetary reserves such as gold or foreign exchange.
The BoG's CBDC aims to bridge the convenience and security of digital currencies like cryptos with the regulated financial system's traditional reserves-backed money circulation. Ghana is also planning to regulate digital assets, including cryptocurrencies, by September 2025, with the proposed Virtual Asset Providers Act intended to protect consumers and maintain financial stability while integrating with traditional financial institutions.
- George Babafemi, the executive director of eTranzact, emphasizes the importance of caution among Ghanaian youth interested in cryptocurrency, urging them to wait for the Central Bank Digital Currency (CBDC) rollout, known as the eCedi.
- Babafemi believes that the eCedi, despite its border limitations compared to cryptocurrencies, will operate in a safer format due to a recognized issuer, the Bank of Ghana (BoG).
- At an entrepreneurship conference organized by the Chamber of Commerce and Industry (CCI) France Ghana, Babafemi advocated for a regulated financial system and patience until the eCedi's rollout, which he views as a basis for regulating cryptocurrency.
- The BoG's CBDC, the eCedi, is set to be a digital representation of the nation's fiat currency, backed by monetary reserves such as gold or foreign exchange.
- Babafemi believes that every government is responsible for its country's economic policies, with the BoG planning to initiate the eCedi pilot by the end of this year within a regulatory and innovation sandbox.
- Ghana is planning to regulate digital assets, including cryptocurrencies, by September 2025, with the proposed Virtual Asset Providers Act intended to protect consumers, maintain financial stability, and integrate with traditional financial institutions.
