E-Cedi holds prospect of facilitating Ghanaian MSMEs participation in international trade – BoG
Mr. Kwame Oppong, the Director of Fintech and Innovation at the Bank of Ghana, says E-Cedi has the potential to facilitate the participation of Ghanaian micro, small, and medium enterprises (MSMEs) in international trade in a cost-effective manner.
“This affirms the potential of the eCedi system demonstrated for future interoperability with various cross-border credential and payment platforms.
The prospective introduction of the eCedi is poised to significantly enhance Ghana’s dynamic payment ecosystem, fostering inclusive growth and innovation while improving consumer experiences,” he said.
Mr. Oppong said this at a brief ceremony to announce the successful completion of the first proof of concept (POC) as part of Project DESFT (Digital Economy Semi-Fungible Token).
He said the DSFT project demonstrated the successful execution of a cross-border transaction payment making use of digital credentials, the eCedi, and an approved stablecoin from Singapore.
The Bank, in collaboration with MAS, initiated Project DESFT in June 2023, and the first phase of the project saw the design and development of a trusted credential system.
The trusted credentials enabled SMEs to transform key information such as basic credentials, licenses, certificates, and trade records into verifiable digital credentials on a secure distributed ledger system, allowing potential trade partners and financial institutions to efficiently verify the authenticity of such information.
Expanding upon this groundwork, in April 2024, Phase 2 of Project DESFT successfully executed a cross-border trade between Ghana and Singapore, leveraging the DESFT solution, Universal Trusted Credentials (UTC), a Singapore stablecoin (xSGD), the recently piloted e-Cedi, and the Purpose Bound Money (PBM) protocol.
Mr. Oppong also said the project DESFT was aimed at supporting SMEs in Africa to engage in international trade by removing significant obstacles they face, such as establishing trust with overseas trade partners and obtaining support in cross-border payments and supply chain finance.
“We believe that the new generation of financial technology offers innovative approaches to these challenges. After nearly a year and two phases of development, we have crafted a reliable information exchange solution founded on UTC standards and semi-fungible token technology. Furthermore, we have rigorously tested a cross-border payment solution built upon the principles of purpose-bound money (PBM) and conducted real-trade experiments that fully align with our predetermined objectives,” he said.
The next phase of Project DESFT will continue to build upon the current achievements, focusing on highly automated digital credential processes, programmable payments across multiple digital currencies, and support for supply chain finance.
Source: GNA