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BoG to use eCedi and Singaporean stablecoin for cross-border transaction payment

The Bank of Ghana (BoG) has announced the successful completion of the first proof of concept (POC) under Project DESFT (Digital Economy Semi-Fungible Token).

Kwame Oppong

This achievement marks a milestone in cross-border transaction payments by utilizing digital credentials, namely the eCedi, and an approved stablecoin from Singapore.

Kwame Oppong, Director of BoG's Fintech and Innovation Office, announced during the 3i Africa Summit on Wednesday, May 15, 2024.

"Today, the Bank of Ghana (BoG) wishes to announce the successful completion of the first proof of concept (POC) as part of Project DESFT (Digital Economy Semi-Fungible Token) which demonstrates the successful execution of a cross-border transaction payment making use of digital credentials, the eCedi, and an approved stablecoin from Singapore," Oppong stated.

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BoG initiated Project DESFT in collaboration with the Monetary Authority of Singapore (MAS) in June 2023. The project's first phase focused on designing and developing a trusted credential system. This system enables Small and Medium Enterprises (SMEs) to convert crucial information, such as credentials, licenses, certificates, and trade records, into verifiable digital credentials on a secure distributed ledger system. This facilitates efficient verification of information authenticity by potential trade partners and financial institutions.

Building upon this groundwork, Phase 2 of Project DESFT, completed in April 2024, successfully executed a cross-border trade between Ghana and Singapore. This was achieved through the DESFT solution, Universal Trusted Credentials (UTC), a Singapore Stablecoin (xSGD), the Ghanaian Central Bank Digital Currency (CBDC) - eCedi, and the Purpose Bound Money (PBM) protocol.

The live transactions demonstrated the feasibility of using the eCedi platform for cross-border transactions, showing its potential for future interoperability with various credentials and payment platforms. The introduction of the eCedi is expected to significantly enhance Ghana's payment ecosystem, fostering inclusive growth and innovation while improving consumer experiences. With interoperability with the DESFT system and verifiable credentials via UTC, the eCedi has the potential to facilitate the participation of Ghanaian Micro, Small, and Medium Enterprises (MSMEs) in international trade cost-effectively.

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Project DESFT aims to support African SMEs in engaging in international trade by removing significant obstacles such as establishing trust with overseas partners and obtaining support in cross-border payments and supply chain finance. The project leverages innovative financial technology to address these challenges.

The next phase of Project DESFT will continue to build upon these achievements, focusing on highly automated digital credential processes, programmable payments across multiple digital currencies, and support for supply chain finance.

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