User base for Ghana’s digital currency much wider than Bitcoin

By David Whitehouse
Posted on Tuesday, 20 July 2021 13:05, updated on Wednesday, 21 July 2021 17:40

Ghana hopes to follow China in adopting a digital currency. REUTERS/Florence Lo

The success of Ghana’s planned digital currency will hinge on how well the advantages are explained to the public, analysts say.

The country is set to start piloting an electronic currency fully backed by the cedi in September. First deputy governor of the central bank, Maxwell Opoku-Afari, has said that Covid-19 has accelerated the shift to a cash-lite economy and that the project will stimulate the growth of digital financial services. No date for the launch of the digital currency has yet been given.

China became the world’s first country to introduce a sovereign digital currency in April 2020. Ghana joins African countries including Morocco, Egypt, Kenya, and South Africa in exploring its feasibility. But central bank creation of digital currencies is not risk-free.

In a book called The (Near) Future of Central Bank Digital Currencies published this year, Tim Masela argues that a possible unintended consequence is that giving the public direct access to their central bank may lead to a loss of confidence in commercial banks and the withdrawal of assets in times of financial crisis.

Ghana’s project “makes a lot of sense” because access to banking remains limited, while access to mobile money is widespread, says James Dzansi, country economist at the International Growth Centre in Accra. Such a currency would make it easier for the government to track financial flows, he adds. “It’s another lever to use.”

  • An electronic currency could also help persuade people not to start using the “highly unstable” crypto-currency bitcoin, Dzansi says.
  • The plan will also help the expansion of the fintech industry and create jobs, he adds.
  • Still, Dzansi cautions, cyber-crime is on the increase and it “remains to be seen” if Ghana’s architecture is sufficient to prevent it expanding into the digital currency space.

Public willingness to adopt such a currency remains unknown, Dzansi says. He questions whether the advantages of the planned currency versus mobile money have been established.

“From the layman’s point of view, there is not much to distinguish it. It’s not yet clear how it will help ordinary people. The central bank needs to articulate the advantages.”


Electronic currency is a “good choice” by the central bank which has the potential to raise financial inclusion, especially in rural areas, says Derrydean Dadzie, a fintech expert in Accra.

The fact that it will be possible to link the currency to the national identity system will allow government payments such as child welfare allowances and pensions to be paid, he says. Digital wallets can easily be provided for qualifying people, he says. “It will be easy for the government to on-board a massive number of people.”

The potential user base for digital currency in Ghana is much wider than for bitcoin for which computers are needed, Dadzie argues. A basic phone will be enough to use digital currency, and even people without a phone will be able to transact through an agent, he says.

Digital currency will also benefit from a higher “credibility level” in terms of security as compared with mobile money. He also sees a spin-off effect from the digital currency in making mobile-money transactions easier.

Still, Dadzie says, “a lot more sensitisation needs to be done. People have to understand the dynamics.”

Bottom line

Communicating the advantages and the risks will be key to persuading Ghanaians to use digital currency.

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