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The recently completed proof of concept by the Bank of Ghana and the Monetary Authority of Singapore demonstrated that the latter’s central bank digital currency enables cross-border payments, excluding many intermediaries and associated costs. Giesecke+Devrient (G+D) stated that the proof of concept (POC) demonstrated the effectiveness of utilizing digital credentials for international trade and cross-border payments.
The Viability of the E-cedi in Cross-Border Transactions
Giesecke+Devrient (G+D), the Ghanaian central bank’s technology partner, has said that the recently completed proof of concept (POC) demonstrated that a long chain of intermediaries and associated costs in cross-border payments are not necessary. G+D further claimed experiment showed that the e-cedi is not only useful for domestic payments but also has the potential to transform cross-border payments.
As previously reported by Bitcoin.com News, the Bank of Ghana (BoG) announced the successful completion of the first POC within the Project Digital Economy Semi-Fungible Token (DESFT) using its central bank digital currency (CBDC), known as the e-cedi. The experiment demonstrated the viability of the e-cedi in cross-border transactions between Ghana and Singapore.
This success underscores the efficacy of using digital credentials for international trade and cross-border payments. The Ghanaian central bank and its Singapore counterpart completed the first cross-border transaction in April.
E-Cedi’s Potential in the Global Token Economy
Before that, the project focused on designing and developing a trusted credential system. At the time, BOG Deputy Governor Maxwell Opoku-Afari hailed this milestone, emphasizing the central bank’s support for small and medium-sized enterprises (SMEs).
Remarking on the success of the POC, Wolfram Seidemann, CEO of G+D Currency Technology, said:
The CBDC pilot in Ghana showed that an eCedi will enhance the Ghanaian domestic payment system. In addition, we now also could prove the digital currency´s potential in the global token economy. This proof of concept demonstrated how combined multiple challenges of international trade could be solved: programmable payments, foreign currency exchange and interoperability with cross-border payment and credentials platforms.
According to the statement, the experiment was a collaborative effort involving Fidelity Bank, a Ghanaian commercial bank that provided banking and exchange services for the CBDC. In addition to demonstrating the utility of the e-cedi, the experiment also highlighted the CBDC’s importance in digitizing international trade for small to medium enterprises.