Bank of Ghana planning to introduce a digital currency, E-cedi, here’s why

The Bank of Ghana has revealed that it will introduce digital activities in order to meet the modern trend as far as technology is concerned.

The Ghana cedis

According to the Governor of the Central Bank, Dr Ernest Addison, the central bank is in discussion with key stakeholders to explore a pilot project (in a sandbox environment) on central bank digital currency with the possibility of issuing the e-cedi soon.

He was speaking at the monetary policy committee meeting in Accra on Monday, November 25, 2019.

“In an increasingly digitized environment, the Bank of Ghana has evaluated its role in a digital economy. The Central Bank is in discussion with key stakeholders to explore a pilot project (in a sandbox environment) on central bank digital currency with the possibility of issuing the e-cedi in the near future,” he said.

He further stated that the BoG will be working closely with banks to ensure that banks do not pass on their operational inefficiencies and overhead costs to their clients.

“To do this,” he said, “steps will be taken to align compensation with overall bank performance by linking it to clear parameters including the quality of a bank’s assets. Bank of Ghana will scrutinise compensation policies for Chief Executive Officers and key management personnel as well as Board of Directors of universal banks.

“To ensure transparency, banks will be required to publish Value Added Statements disclosing details of the compensation packages of key management personnel and Boards of Directors separately from total employee compensation.

To further deepen transparency in the determination of lending rates, banks will be required to develop and publish a clear framework on the risk premium build-up that impacts on an individual borrowers’ credit profiles,” he added.

The Governor concluded that “This is expected to provide borrowers with a more-informed basis for negotiating lending rates with their banks, and enhance transparency in the credit delivery process as well as promote responsible credit behaviour from borrowers.”

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