Allow local firms provide cryptocurrency services – Prof Quaynor tells BoG
Professor Nii Narku Quaynor, Chairman of Ghana Dot Com, has advised the Bank of Ghana (BoG) to provide the policy environment necessary for local firms to provide cryptocurrency services.
According to Prof Quaynor, the Central Bank should come up with what he terms as “innovation regulation” for the adoption and use of cryptocurrencies in the country.
“We as a country should forward and adopt cryptocurrencies through innovation regulation. The policy environment should support Ghanaian companies to venture into providing cryptocurrency services locally before the market is captured by international operators,” he stated.
His call comes at a time when BoG has cautioned the public and financial institutions against an emerging Ghanaian cryptocurrency platform, Freedom Coin, and against all cryptocurrencies.
Meanwhile, one of the world’s biggest crypto platforms, Binance is advertising in Ghana via some paid TV channels. Again some crypto platforms are also operating into Ghana via digital channels.
Prof. Quaynor cautioned that regulators in Ghana should be careful not to treat cryptocurrency and blockchain like they did to the internet and waited for international operators to dominate it before Ghana started playing catch up.
He noted that the global blockchain and crypto industry is fast consolidating with global companies already building up wallets, while Ghanaian companies are restrained.
“We are hopeful that Blockchain technologies will not suffer the same fate as the internet, where we went from over 100 local ISPs (internet service providers) in the 90s to a handful of multinational companies providing internet services in Ghana today,” he said.
Speaking on the importance of blockchain and its related technologies at the maiden Africa Technovate Awards in Accra, Prof. Quaynor lauded the BoG for steps towards rolling out its Central Bank Digital Currency (CBDC), the eCedi.
BoG designs offline and online wallets for eCedi
The Central Bank, amid its pilot phase and subsequent rollout of the electronic cedi (eCedi), has created two wallets for the Central Bank Digital Currency (CBDC).
The apex bank in its eCedi Design Paper report, asserts the two wallets created include Hosted Wallets which will be managed by the various financial institutions in the country and Hardware Wallets which are secure portable storage devices held by individuals.
According to the Bank of Ghana (BoG), Hosted Wallets require access to the internet to be operational whereas Hardware Wallets work in offline mode.
“The most optimal form factor for the eCedi wallet is the app for a smartphone developed by commercial banks, FinTech companies, and other service providers. Other devices can be utilized depending on user preferences and payment scenarios. These could be smartcards (including the biometric ones) or wearables such as smart watches that contain communication capabilities and a secure element.
“Similarly, debit cards and USSD devices (feature phones) which are associated with the existing payment landscape in Ghana can be adapted for eCedi. Thus users can get the type of wallet that suits their needs from a bank or other financial service provider,” noted the Bank.
The BoG in the report further asserts that the eCedi will be a retail token-based CBDC. A retail token-based eCedi is a value based approach that implies an eCedi that represents a token, or a digital value note.
Payment is done by transferring the value note from one person to another. The concept is similar to cash payment transactions, where payment is done by transferring banknotes and/ or coins from person A to person B.
In brief, retail CBDC is digital cash that is designed to take on most traditional attributes of physical cash (in practice, though, it may have other additional functionalities depending on its final design).
Retail CBDC could be used by individuals for P2P transfers, and P2B, B2P, B2B, P2G, and G2P payments besides cash and existing payment media and instruments (e-money, payment cards, etc.)
In a free will economy playing out in the international market ,it is imperative that BOG find a means of naturing support and harmonic business- friendly environment in Ghana,as trend recognizability is a fundamental key for the ailing economy to be boosted vis the Blockchain technology and it’s related advantages.The cons can nipped in the bud,by a regulatory frame work but not necessarily witch-hunting savvy cryptonuaers as it would be detrimental to our foreign inflows.Allowing an open play field with checks is the way to go. CEO First forex Academy consultancy E.A.KOOMSON.