The Bank of Ghana (BoG) has been urged not to charge interest on the yet-to-be-introduced digital currency, otherwise known as E-Cedi.
According to stakeholders, the inclusion of interest would bring about unhealthy competition with bank deposits and fiscal currency.
Head of Digital and Inclusive Banking, Cal Bank, Martha Acquaye, said charging interest on the E-Cedi would put a lot of stress on the banking and the financial sector because, “it would mean that we would be competing on rates with the digital currency.”
She said this would translate in deposits going down, an increase in the cost of funds and subsequent increase in the cost of lending.
“So, we encourage the Central Bank that as part of the implementation to consider interest-free digital currency,” she said.
Ms Acquaye made the call at the 2022 MoMo Month Stakeholders Forum organised by Mobile Money Limited (MTN MoMo) in Accra.
The forum was on the topic, “The Impact of Central Bank Digital Currency (CBDC) on Future Digital Payments.”
CEO of MTN MoMo, Eli Hini, said the Central Bank is currently piloting the E-Cedi hence the need for stakeholders to understand how it impacts the overall ecosystem.
He said it was critical for payment service providers to get informed and understand where the conversation is going and how they can align their businesses to take advantage of the opportunities that it presents.
“We need to set business in a way that can take advantage of innovations that would come up looking at the opportunities and how you can leverage on it,” he stated.
Mr. Hini said the introduction of the E-Cedi would add value to the mobile money system in terms of settlements.
“E-Cedi, when implemented effectively, would address that problem and improve on the efficiency of settlements. It also speeds up the process of rebalancing of accounts by MOMO agents because with the E-Cedi account they can move money to their MOMO account,” he said.
Allaying the fears of the E-Cedi competing with MoMo, Mr. Hini said, “just like MoMo came and created opportunities for people, other innovations would come with its opportunities and we should be ready to embrace it.”
Assistant Director, Fintech Promotion and Innovation BoG, Clearance Blay, said the E-Cedi is part of the government’s agenda of digitalising the ecosystem.
He indicated that digital currency would bring financial inclusion and help financial service providers to provide more value-added services.
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