The International Monetary Fund (IMF) researchers, including Tobias Adrian, Dong He, Tommaso Mancini-Griffoli, and Tao Sun, have asserted that Central Bank Digital Currencies (CBDC) hold the potential to enhance payment systems and financial inclusion if appropriately designed, though poorly designed CBDCs may pose risks.
The researchers recommend that countries carefully and systematically explore CBDCs, emphasizing that benefits are likely to emerge over time based on policy decisions, private sector responses, and technological evolution.
In Ghana, Bank of Ghana Governor Dr. Ernest Addison acknowledged the rapid changes in information and communication technology and its impact on global activities.
He highlighted the central role of technology in national development and noted the Bank’s efforts in fostering a conducive environment for digital financial services.
“Benefits are more likely to come in time, following the policies pursued by countries and the private sector’s response, as well as the evolution of technology.
“In most cases, it would be useful for countries to continue exploring CBDC, carefully and systematically, as IMF Managing Director Kristalina Georgieva noted in her recent speech at the Singapore Fintech Festival,” they said in a publication on the IMF Blog.
Dr. Addison emphasized the emergence of various digital financial services, attributing the significant improvement in financial access from 41% in 2014 to 68% in 2021 to interventions supporting financial inclusion.
He expressed optimism about the potential of a central bank digital currency (CBDC) to further advance financial inclusiveness in the country, grounded in policy imperatives such as financial inclusion, payment safety, efficiency, and the digitalization of the Ghanaian economy.
“Therefore, our ability to appreciate, adopt, and adapt to technology will help position the financial services industry to drive national development efforts,” he stated.
“Currently, the financial sector can boast of a variety of digital financial services, including payment, credit, savings, and investment products that are offered by banks and FinTechs. New business models have emerged through FinTech channels and removed barriers to micro-credit as well as paved way for affordable and convenient inward remittance services.
“These interventions have fostered financial inclusion in the country, evidenced by the phenomenal improvement in financial access from 41% in 2014 to 68% in 2021, according to the Global Findex Report of the World Bank,” Dr Addison said.
The Governor mentioned the publication of a design paper and solicitation of public input as steps taken by the Bank of Ghana to communicate its CBDC concepts, paving the way for a pilot project aligned with the needs and aspirations of Ghanaians. Dr. Addison shared these insights at the eCedi Hackathon awards dinner in Accra on December 14.
“Despite the progress made, much remains to be done to meet the financial service needs of every citizen in meaningful ways. This therefore calls for an innovative mindset, creativity, and collaboration in exploring novel solutions of which a central bank digital currency is promising. It is therefore our belief that the Bank’s CBDC will further push the frontiers of financial inclusiveness in the country.
“Indeed, Bank of Ghana’s CBDC exploration journey is grounded on several policy imperatives, including financial inclusion, safety and efficiency of payments, and the growing digitalisation of the Ghanaian economy. Beginning with the publication of a design paper, the Bank of Ghana communicated in clear terms its concepts of CBDC and solicited comments on how to proceed with a CBDC pilot project that will meet the needs and aspirations of Ghanaians,” he said while speaking at the eCedi Hackathon awards dinner in Accra, last Thursday, December 14.