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BoG refutes claims of Ghana becoming a dual currency state

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The Bank of Ghana (BoG) has responded to an article titled “Is Ghana Becoming a Dual Currency State? The Rise of Yellow Currency!” to correct some inconsistencies and misinformation.

The article claimed electronic money was superseding the Ghanaian cedi for which reason strategic measures had to be taken to safeguard the use and relevance of the cedi.

But the Communications Department of the BoG in a statement issued on Thursday, May 30 clarified that in 2007, when licensing mobile money, Ghana decided on the bank-based model, while other jurisdictions rolled out the telco-based model.

According to BoG,  the author of the article confused the telco-based model with the bank-based model as all such services in the country had banks and fintechs (licensed by BoG) behind them with actual transactions in cedis.

The BoG said these back-office services, coordinated by the Ghana Interbank Payments and Settlement Systems (GhIPSS)—a wholly owned subsidiary of BoG, were not visible to the general public and that was what distinguished Ghana from other telco-based jurisdictions.

“In fact, Ghana is among the few countries that have full interoperability between mobile money wallets and bank accounts and are fully backed by cash floats at corresponding commercial banks, without which settlement won’t happen. Other jurisdictions are now trying to establish such interoperability.”

“That said, the BoG is fully engaged and will continue to monitor this ecosystem to ensure we constantly promote financial stability while balancing that with flexibility for financial inclusion,” the BoG further stated.

READ THE FULL STATEMENT BELOW

RE: IS GHANA BECOMING A DUAL CURRENCY STATE? THE RISE OF YELLOW CURRENCY!

The Communications Department of the Bank of Ghana has noted the contents of an article titled “Is Ghana Becoming a Dual Currency State? The Rise of Yellow Currency!” and finds it important to correct some inconsistencies and misinformation in the article.

In interacting with journalists on the issue, the Bank of Ghana (BoG) explained that it is aware of the situation in other jurisdictions. Fortunately, the BoG explained that in 2007, when licensing mobile money, decided on the bank-based model, while other jurisdictions rolled out the telco-based model.

What the author wrote is confusing the telco-based model with the bank-based model in Ghana. In Ghana, all such services have banks and fintechs (licensed by BoG) behind them and actual transactions are in cedis. Such back office services are not visible to the general public, and are coordinated by the Ghana Interbank Payments and Settlement Systems (GhIPSS)—a wholly-owned subsidiary of BoG. And, this is what distinguishes Ghana from other telco-based jurisdictions.

In fact, Ghana is among the few countries that have full interoperability between mobile money wallets and bank accounts, and are fully backed by cash floats at corresponding commercial banks, without which settlement won’t happen. Other jurisdictions are now trying to establish such interoperability.

That said, the BoG is fully engaged and will continue to monitor this ecosystem to ensure we constantly promote financial stability while balancing that with flexibility for financial inclusion.

Communications Department, Bank of Ghana

30th May 2024

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