Ghana Could Shake Up African Financial Markets with CBDC

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Dr. Ernest Addison
Dr. Ernest Addison

Earlier this month, Governor Ernest Addison announced that Ghana’s central bank is “in the advanced stages of introducing a digital currency.” The move makes it among the first nations on the continent to move towards a CBDC. He intimated that the design of the digital currency was a success, and that the country is beginning to investigate implementation.

“I’ve always believed that Ghana is among the most logical countries in Africa to serve as a fintech hub. In terms of infrastructure — whether we’re talking economic infrastructure, technological infrastructure, or political infrastructure — there really are only a handful of other African nations which could rival Ghana as a leader,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges. “Clearly, launching a CBDC would keep them on that track.”

The governor noted at the press conference that the next steps would be a pilot program to launch the digital cedi into real-world application. A similar process is already well underway in China, where the country is beta testing its e-yuan. A number of countries are beginning to take a long look at how they can implement their own digital currency; earlier this month, the president of El Salvador announced that he aimed to make Bitcoin an official currency.

“CBDCs are the future of currency, so it is no surprise that there’s a race towards developing them and building out the infrastructure necessary to utilize them in a mainstream manner. However, with that said, few countries are as far along the path as Ghana seems to be,” Gardner noted. He explained that a pilot program would allow government officials to test their technology and work out the kinks before launching it nationally.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

Governor Addison noted during his speech that “… there is a lot more emphasis on looking at digital money which is backed by the state, backed by the central banks. These private forms of money really are not able to perform the functions of money effectively.”

“The governor is definitely correct that CBDCs are the money of the future. We already have several major banks working with us to ensure that they are prepared for the day that digital assets are the norm. There’s a lot of preparation that exchanges, banks, and even multinational corporations need to do in order to be able to take advantage of the full power of digitized currencies, once central banks begin to release them. The time for planning is now. The race for CBDCs is this century’s equivalent to the Race to the Moon,” Gardner opined.

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