According to Bloomberg, Kwame Oppong, the Bank of Ghana’s head of fintech and innovation, aims to ensure that the country’s e-cedi would be able to work offline through the use of smart cards, similar to chipped bank cards. One of the great benefits expected of the rise of CBDCs is that it will bring many in the unbanked population into our financial system. However, Oppong noted at a Ghana Economic Forum meeting that many of those without access to banking services also may not have the ability to connect to the internet. Enter: smart cards.
“What we hope to be able to do – and we’re one of the people pioneering this – is that the e-cedi would also be capable of being used in an offline environment through some smart cards,” Oppong was quoted as saying. Others are skeptical, saying that, if cards worked offline, there would be the chance for duplicative spending.
The Bank of Ghana is planning to pilot its e-cedi soon. Pilots are similar to beta tests. It is the point where you throw all the innovative ideas at the wall to see what sticks and what you can provide while ensuring security and functionality. Now is the right time for Ghana to explore exactly how a smart card would work.
This isn’t a concern which is unique to Ghana. Many parts of the world have large swathes of the population with limited connectivity. Some places even have a limited, reliable stream of electricity. Finding a way to put the power of the blockchain onto a card, which could then be used while offline, would expand the universe of potential users, and it would even alleviate some of the educational issues which are sure to stymy some government backers.
Indeed, it doesn’t matter how secure or functional your CBDC is if you can’t get the populace on board to use it. El Salvador tried to incentivize utilizing Bitcoin when it first premiered as legal tender. Many countries will likely incentivize their CBDC rollout. But, at the end of the day, there will be some segments of the universe which will be unable or unwilling to adapt to technological innovation.
Being able to offer a smart card, which, in functionality, is much the same as a debit card, could very well help transition people face technological obstacles without being ideologically opposed to the innovation. Some folks will have an ideological opposition to a CBDC. That’s to be expected. However, many more slow adapters are likely to simply be unfamiliar with, or worried about, the technological component. Finding a way to allow for offline spending through a mechanism which is, functionally, similar to bank cards they are familiar with, could begin to solve some of those problems.