Digital currencies seem to be gaining quite the popularity with various advanced countries experimenting with it. China has already piloted Digital Yuan in an effort to replace the traditional cash, Britain, the Britcoin. The United States is also experimenting on digitizing the dollar, as well as over 70 other countries such as Venezuela and Jamaica.

Ghana is the first African country to pilot a Central Bank Digital Currency (CBDC). The experimentation is expected to be launched in September. Following suit, the Central Bank of Nigeria is also expected to launch the E-Naira in October of this year. CDBC is an electronic form of money regulated by a country's central bank. As a virtual or electronic currency, it is like crypto currencies, however, unlike crypto currencies, it is backed and protected by the Central Bank, thus the government.

The E cedi is expected to complement the traditional cedi. As such, it would be afforded the power to make payments, buy and function in the same capacity as the Fiat currency. This would help meet the country's economic digitization goals.  

Why an E-cedi(CBDC )?

The E-cedi as a virtual currency allows the Bank of Ghana to regulate digital currencies, thus providing a less volatile alternative to existing crypto currencies such as Bitcoin. Therefore, the central bank hopes to provide a more secure form of transaction to keep up with trends of modernity.

E-cedi also promotes a cashless society by either complimenting or replacing the traditional Fiat currency. Across most African developing countries, there is a steep rise in cashless transactions such as Mobile Money. The E-cedi is expected to be a more efficient and cost effective way of transacting. CBDC transactions cut out intermediaries, making consumers pay less for direct transactions.

Despite providing several benefits to ordinary Ghanaians, the E-cedi like any other forms of digital currencies is not foolproof, hence the experimentation. As with the mobile money system that was followed by a steep rise in fraudulent transactions, without the proper education, the E-cedi could be followed by a rise in fraudulent cases. The initiation of government regulated digital currencies also pose several questions about transparency and surveillance as with the E-Naira of Nigeria.

Further, Ghanaians are actually not change susceptible, and might resist the E-cedi in view of superstitious beliefs. Unlike other advanced countries, a great number of Ghanaians are not computer literate and have not even adjusted to traditional banking. As such, whether the digital currency would be adopted is another hurdle to the Central Bank of Ghana. Without the technological know - how, and right devices, would the E-cedi be "yam"-friendly?