Ghana’s central bank has announced the launch of an eCedi hackathon. The project will run for 12 weeks and bring together teams of programmers, designers, engineers and other financial professionals to identify the potential use cases of a Central Bank Digital Currency (CBDC).
In June 2021, the Bank of Ghana was one of the first African central banks to declare interest in establishing a CBDC, and two months later it signed a contract with Germany’s Giesecke+Devrient (G+D) Currency Technology to commence with the first pilot project.
The hackathon is being run by Emtech, a startup company involved in multiple CBDC projects around the world. The company already has experience running research projects within emerging market economies. Earlier this year it announced a strategic partnership with the West African Monetary Institute. It’s also a participant in the Digital Dollar Project.
The hackathon can provide important research for the CBDC’s implementation, and developers will explore multiple use cases across a variety of sectors.
One of the potential solutions is the use of eCedi for G2B and B2B payments in agriculture and trade. Programmable money could ensure that loans and subsidies are spent appropriately, and could even automate the lending application process. This would reduce the role of regulators, ensuring recipients comply with lending requirements, and reducing the costs of providing the loans. Ultimately this allows businesses and farmers to borrow from the government and commercial banks at cheaper interest rates.
Many jurisdictions are concerned about the potential use of their CBDC for money laundering or illicit transactions. This is one of the areas that the Bank of Ghana wants to investigate in the hackathon. Additionally, as with most CBDC research projects, privacy is also a major public concern, and the hackathon will explore methods to ensure data Privacy for those holding or transacting with eCedi.