Ghana: Bank of Ghana Completes Two Phases of Cross-Border Trading Using Digital Credentials

The Bank of Ghana (BoG) has successfully completed two phases of its Project DESFT, aimed at enhancing cross-border trade using digital credentials.

Phase 1: This phase focused on designing and developing a system to streamline trade information verification and reduce costs for micro, small, and medium-sized enterprises (MSMEs).

Phase 2: This phase executed a cross-border trade between Ghana and Singapore, utilizing the DESFT solution.

Project DESFT’s next phase will target highly automated digital credential processes, programmable payments across multiple digital currencies, and support for supply chain finance.

Launched in June 2023 by the BoG and the private sector, Project DESFT aims to introduce solutions such as Universal Trusted Credentials (UTCs), Central Bank Digital Currency (CBDC), stablecoins, a trade marketplace, and an escrow arrangement, facilitating payments upon successful verification of digital credentials and trade fulfillment.

Key Components:

• Universal Trusted Credentials (UTC): The UTC framework allows for the digital representation and exchange of licenses, certificates, and trade records.
• Central Bank Digital Currency (CBDC): The eCedi, Ghana’s retail CBDC, demonstrated its potential in live cross-border trade transactions, indicating future interoperability with various international credential and payment systems. This innovation aims to ease the participation of Ghanaian MSMEs in global trade cost-effectively.
• Stablecoins: StraitsX issued a Singapore dollar-pegged stablecoin for digital payments, based on the Purpose Bound Money (PBM) concept.

Supporting Infrastructure:

• G+D: Designed and developed the eCedi infrastructure.
• Fidelity Bank Ghana: Provides banking and exchange services.

Maxwell Opoku-Afari, BoG’s first Deputy Governor, highlighted that the project would help African SMEs enter international trade by removing significant barriers.

In May 2024, Vice President Mahamudu Bawumia announced progress in digitizing government services, allowing online access and electronic payments. Ghana is also investing in blockchain technology to ensure data security and integrity, 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.