The Bank of Ghana (BoG) has declared the first Proof of Concept (PoC) for Project Digital Economy Semi-Fungible Token (DESFT) successfully completed.
This milestone showcases the effective execution of a cross-border transaction using digital credentials, namely the eCedi and an approved stablecoin from Singapore.
Collaborating with the Monetary Authority of Singapore (MAS), the BoG initiated Project DESFT in June 2023.
During the initial phase, the project focused on designing and developing a trusted credential system.
This system enables Small and Medium-sized Enterprises (SMEs) to convert essential information such as credentials, licenses, certificates, and trade records into verifiable digital credentials. These are stored on a secure distributed ledger system, facilitating efficient verification by potential trade partners and financial institutions.
Building on this foundation, Phase 2 of Project DESFT, conducted in April 2024, successfully conducted a cross-border trade between Ghana and Singapore.
This was achieved using the DESFT solution, Universal Trusted Credentials (UTC), a Singapore Stablecoin (xSGD), Ghana’s Central Bank Digital Currency (CBDC) – the eCedi, and the Purpose Bound Money (PBM) protocol.
According to the BoG, these live transactions further validate the potential of utilizing the proposed Ghanaian domestic retail CBDC platform, the eCedi, in cross-border transactions.
“Project DESFT is aimed at supporting SMEs in Africa to engage in international trade by removing significant obstacles they face, such as establishing trust with overseas trade partners and obtaining support in cross-border payments and supply chain finance. We believe that the new generation of financial technology offers innovative approaches to
these challenges. After nearly a year and two phases of development, we have crafted a reliable information exchange solution founded on UTC standards and Semi-fungible Token technology.
“Furthermore, we have rigorously tested a cross-border payment solution built upon the principles of Purpose Bound Money (PBM) and conducted real trade experiments which fully align with our predetermined objectives.
“The next phase of the Project DESFT will continue to build upon the current achievements, focusing on highly automated digital credential processes, programmable payments across multiple digital currencies, and support for supply chain finance.”