Bank of Ghana completes two phases of cross-border trading using digital credentials

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June 13, 2024
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2 min read
Bank of Ghana
  • The Bank of Ghana (BoG) and the Monetary Authority of Singapore (MAS) have completed the first proof of concept (POC) for Project DESFT (Digital Economy Semi-Fungible Token), which demonstrates the use of digital credentials in international trade and cross-border payments.
  • The project, completed in two phases, aims to enhance Ghanaian MSMEs' participation in international trade through a trusted credential system.

Phase 1 involved designing and developing the system, to enable efficient trade information verification and reduce costs for MSMEs. Phase 2 executed a cross-border trade between Ghana and Singapore, utilising the DESFT solution.

Project DESFT's next phase will focus on highly automated digital credential processes, programmable payments across multiple digital currencies, and supply chain finance support.

The BoG and the private sector launched Project DESFT in June 2023 to introduce solutions such as Universal Trusted Credentials (UTCs), Central Bank Digital Currency (CBDC), stablecoin, trade marketplace, and escrow arrangement, which allows payments to be made after successful verification of digital credentials and trade fulfilment.

The Universal Trusted Credentials (UTC) framework allows for the digital representation and exchange of licences, certificates, and trade records. StraitsX has issued a Singapore dollar-pegged stablecoin for digital payments based on the Purpose Bound Money (PBM) concept.

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The BoG stated that using eCedi, Ghana's retail CBDC, in live cross-border trade transactions shows its potential for future interoperability with various international credential and payment systems. This will make it easier for Ghanaian MSMEs to participate in global trade without breaking the bank.

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G+D designed and developed the eCedi infrastructure, while Fidelity Bank Ghana provides banking and exchange services. 

Maxwell Opoku-Afari, the Bank of Ghana's first Deputy Governor, said the project would help African SMEs enter international trade by removing significant barriers.

Vice President Mahamudu Bawumia announced Ghana's progress in digitising government services in May 2024, stating that government agencies can now access services online and make electronic payments. Ghana is also investing in blockchain technology to ensure the security and integrity of government data, tracking every change made to digital data.

In the same month, Ghana agreed with India to implement India's Unified Payments Interface (UPI) on its Ghana Interbank Payment and Settlement Systems (GHIPSS) to facilitate low-cost, instant fund transfers. 

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