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Bank of Ghana Launches Hackathon to Explore Various Use Cases of CBDC
The Ghanaian central bank said it will be hosting a 12-week hackathon where participants are expected to explore the e-cedi’s nine different use cases. At the end of the hackathon, the central bank will hold a conference where individuals with outstanding solutions are recognized.
Addressing Ghana’s Financial Inclusion Challenges
The Ghanaian central bank, also known as Bank of Ghana (BOG), recently announced the launch of a central bank digital currency (CBDC) hackathon. According to the bank, this event seeks to avail opportunities to fintech startups, developers and innovators to develop innovative solutions that explore various use cases of CBDC.
https://t.co/bvOB6EsBoW#eCedi #hackathon #bankofghana pic.twitter.com/KOGqPwBrGT
— Bank of Ghana (@thebankofghana) October 6, 2023
In a press release jointly issued with technology partner Emtech, the Ghanaian central bank said the hackathon will run for a period of 12 weeks. During this time, innovators are expected to come up with solutions that address financial inclusion challenges. At the end of the hackathon, a conference where outstanding solutions are recognized will be held.
Real Life Use Cases
Explaining why this method of discovering the best solutions was chosen, the BOG said:
“The project is a part of the e-cedi research project and presents an opportunity for the Bank to explore emerging technologies, foster creativity and contribute to the advancement of the e-cedi development.”
Meanwhile, the Ghanaian central bank stated that individuals and teams with a passion for the technology are eligible to join the hackathon. Among the nine use cases that the BOG wants developers and innovators to focus on is the use of the e-cedi in merchant transactions. Other use cases include using the e-cedi for government payments and inbound remittances.
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Why Bitcoin Matters: Ghana Finance Crisis Ties Up $1.6 Billion for 70,000
For the longest time, Bitcoin (BTC) has been viewed as something with no inherent value.
Legendary investor Warren Buffett, for instance, once called the cryptocurrency “rat poison squared”, later explaining that there isn’t much inherent value in the project. Other notable players in finance and politics, including U.S. President Donald Trump, have echoed this analysis, using phrases like “thin air” and “unbacked” to get their point across.
Related Reading: Bullish for Bitcoin Price: Wall Street’s Ex-Central Bankers Advocate For “Free Money”
Unlike traditional stocks and assets, Bitcoin doesn’t provide a fixed yield, a dividend, or generate cash flow. And compared to traditional and modern fiat currencies, BTC isn’t backed by the power of a government or the scarcity of an underlying asset.
But, a series of recent macroeconomic and geopolitical events all across the world have begun to prove that Bitcoin is needed, whether governments, Wall Street, Silicon Valley, or central bankers like it or not.
Bitcoin is Needed, Now
According to a recent report from Bloomberg, Ghana is in the midst of a financial crisis. The report, published this weekend, suggests that there are 70,000 Ghanaian investors affected in a “cleanup” of the nation’s banking industry.
The outlet writes that the crackdown, which resulted in many local lenders and savings companies shuttering their businesses, “triggered a run on fund managers”, most of which who weren’t liquid enough to satisfy the demands of their investors.
A banking crisis in Ghana means .6 billion of savings is now possibly gone for 70,000 investors.
The savings of tens of thousands wiped-out over night.
This is why saving your wealth should be simple and not need a middleman.
Bitcoin fixes this.
— Rhythm (@Rhythmtrader) August 19, 2019
Due to this, there exist a purported 70,000 Ghanian investors who can’t access .6 billion worth of their investments, more than a third of the African country’s private fund sector. Yikes.
According to cryptocurrency commentator Rhythm, Bitcoin “fixes this”. What he/she seems to be referring to is the fact that unlike the traditional fiat system, Bitcoin and other decentralized technologies don’t require middlemen.
Should you be investing in the right products and with the right infrastructure, you should be the only one that can manage your Bitcoin and cryptocurrency investments.
This crisis in Ghana is somewhat reminiscent of what happened in Cyprus around five years ago. For those who missed the memo, the European island nation was required to bail in its commercial banks, resulting in thousands losing their wealth, a run on the banks, and a subsequent spike in local Bitcoin demand.
Of course, Ghana is in a different situation, but the underlying need for Bitcoin then and now is all the same, if not more accentuated. Bitcoin is decentralized, non-sovereign, scarce, immutable, programmable, and unconfiscatable.
Related Reading: Bitcoin as a Safe Haven: Yet Another Recession Indicator Flashes
World is Screaming for An Alternate Economy
This crisis comes as many other facets of the world are starting to scream for something new, something different.
Just look to Argentina, where the incumbent president lost a recent race to someone who analysts say will plunge the South American economy into yet another bout of chaos. This political result led to a 20% collapse in the Peso against the U.S. Dollar, a 50% collapse in the local stock market, and a slight uptick in Bitcoin volumes and a premium for cryptocurrency.
There’s also a crisis in Hong Kong, where literally millions of locals have been taking to the streets to protest the actions of the local government and the mainland Chinese government, who they say are encroaching on their democratic freedoms. There, too, a premium on the price of Bitcoin has been seen.
Bitcoin, according to a growing number of analysts, is a perfect hedge against macroeconomic turmoil, geopolitical debacles, inflationary monetary policies, irresponsible fiscal policy, and so on and so forth.
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110,000 Investors in Ghana Lost $25.7 Million in Crypto Scams and Hacks
Around 110,000 Ghanian investors lost a total of .71 million to crypto investment scams and hacks in 2018, the lawmakers noted.
Ama Pomaa Boateng, the member of parliament for Ghana’s Juaben town, initiated a dialogue against the crypto-led investment epidemic. The 43-year old public representative, while addressing the Ghana parliament, stressed on the need for sound crypto regulation, citing the 2018’s notorious Global Coin Community Scam that swindled 109,259 Ghanaians to the tune of GHC134m. The Scammers promised victims a monthly return of 27-percent for a year but later ran away with their crypto-based capital investments.
“There is the issue of lack of compliance due to the nature of cryptocurrency and crypto asset because the users are anonymous and it is extremely difficult to collect data on digital currency users,” Boateng said.
Crypto Traders are Illegal in Ghana
While Ghana’s Securities and Exchange Commission (SEC) is considering to introduce a cryptocurrency law, trading of such assets remains illegal in the country, clarified Dr. Mark Assibey Yeboah, the chairman of the finance committee. The parliamentarian considered the decentralized nature of cryptocurrencies a threat to their financial system, adding that regulators would eventually gain a firm grip on the industry.
“This is a digital platform where money is transferred amongst the peers. It is not the cheque system where a central bank clears it,” Dr. Yeboah said.
The MPs in one voice cautioned the public against investing in or conducting cryptocurrency transactions. The warning was reminiscent of how SEC’s Deputy General Paul Abadio refused any legal help for the victims of Global Coin Community scam.
“When you choose to go there, you are on your own,” he had said, adding they were still doing “research and gathering information” on the matter. The Economic and Organised Crime Office (EOCO) earlier had arrested two directors in connection with the scam. However, the agency later released them following their bail application approval.
Educating Public About Crypto
James Klutse Avedzi, the chairman of the public accounts committee, said that their public and government authorities were yet to learn about the nature of cryptocurrencies and how to deal with them. The proceeding delays in the Global Coin Community scam somewhat pointed to the fact that Ghana was without a crypto law all this time. And since the scammers siphoned off investors’ money in cryptocurrencies, there was a likelihood of them slipping through the legal cracks.
Avedzi suggested that the government should ask the Bank of Ghana to research cryptocurrencies. The lawmaker added that it would help the central bank draft new policies in the cryptocurrency space. Daniel Okyem Aboagye, another parliamentarian, supported the idea, stating that the government should educate the Ghanian population about cryptocurrencies.
“The discussion is good,” Aboagye said. “It tells the entire nation that lawmakers are concerned about the happenings in the cryptocurrency industry.”
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