BoG reports successful use of eCedi in a cross-border transaction

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May 20, 2024 - 07:43

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BoG reports successful use of eCedi in a cross-border transaction

The Bank of Ghana’s Director of Fintech and Innovation Office, Kwame Oppong, has announced the successful completion of a cross-border transaction payment using the eCedi, the digital currency of Ghana’s central bank, and a stablecoin that has been approved from Singapore.

This shows that the first proof of concept (POC) for Project DESFT (Digital Economy Semi-Fungible Token) has been completed.

At the recently concluded 3i Africa Summit, Kwame Oppong made the announcement. He explained that the first phase of the project involved the design and development of a trusted credential system that helps SMEs to convert important data, including trade records, licences, certificates, and basic credentials, into verifiable digital credentials on a secure distributed ledger system. This enables prospective business partners and financial institutions to quickly and effectively confirm the veracity of such data.

He claims that the second phase of Project DESFT, which made use of the eCedi, the Purpose Bound Money (PBM) protocol, a Singapore Stablecoin (xSGD), the DESFT solution, Universal Trusted Credentials (UTC), the recently piloted Ghanaian Central Bank Digital Currency (CBDC), and the eCedi, successfully executed a cross-border trade between Ghana and Singapore in April 2024.

According to Mr. Oppong, the eCedi live transactions further proved that using the proposed domestic retail CBDC platform in Ghana for cross-border transactions is feasible. This confirms the eCedi system’s potential for future interoperability with different cross-border payment and credential platforms.

With the potential implementation of the eCedi, Ghana’s dynamic payment environment is expected to be greatly improved, promoting inclusive growth and innovation as well as bettering customer experiences. The eCedi offers the potential to cost-effectively enable Ghanaian Micro, Small, and Medium Enterprises (MSMEs) to participate in international trade through its interoperability with the DESFT system and verifiable credentials via UTC.

Mr Oppong states that the goal of Project DESFT is to assist African SMEs in conducting business internationally by eliminating major barriers they encounter, like building confidence with foreign trading partners and securing assistance with cross-border payments and supply chain financing.

We think that the newest wave of financial technology provides creative solutions for these problems. We have developed a dependable information exchange system based on UTC standards and Semi-fungible Token technology, after over a year and two phases of development.

Furthermore, he said, “We have carried out actual trade experiments that fully align with our predetermined objectives and rigorously tested a cross-border payment solution built upon the principles of Purpose Bound Money (PBM).”