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

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

<p class="">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.</p>

<p class="">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.</p>

<p class="">He was speaking at the monetary policy committee meeting in Accra on Monday, November 25, 2019.</p>

<p class="">“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.</p>

<p class="">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.</p>

<p class="">“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.</p>

<p class="">“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.</p>

<p class="">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.</p>

<p class="">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.”</p>

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