Senior lecturer at the University of Ghana Business School, Dr. Benjamin Amoah, has allayed fears that regulating cryptocurrencies will negatively affect the value and stability of the Ghana cedi.
This assurance from Dr. Amoah comes on the back of recent discussions around the regulation of digital currencies.
Addressing concerns about the crypto space in an interview monitored by The High Street Journal, the senior lecturer at the University of Ghana Business School explained that cryptocurrencies operate independently of central banks and are driven mainly by demand and supply, which causes their value to fluctuate.
However, he stressed that the cedi’s value is influenced by the country’s reserves, not by market speculation.
He noted that the Bank of Ghana’s E-Cedi, a state-issued digital version of the cedi, will further strengthen this stability. Unlike cryptocurrencies, the E-Cedi will be fully backed by Ghana’s reserves and managed by the central bank, just like physical cash.
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“What will happen is that the Central itself, I think, some few months ago, talked about its own digital currency, what we call the E-Cedi. And that E-Cedi is similar to cryptocurrency, but the difference is that with the E-Cedi, it is the central bank or the state that is issuing it. The value of the E-cedi, which is the same as your cedi in your pocket, will be backed by the country’s reserves,” Dr. Amoah explained.
He continued, “So the volatility there is just like what we have within the normal Ghana Cedi we are using. In the crypto space, because it is decentralised, the value of the currency is an issue of supply and demand. And currency per se should not have its value changing because of demand and supply. The stability of the currency should be influenced by the reserves that back the currency.”
His comments come at a time when governments around the world are grappling with how to manage the growing influence of cryptocurrencies. In Ghana’s case, the move to regulate digital assets is aimed at protecting consumers and preserving economic stability, not undermining the national currency.
Dr. Amoah emphasized that Ghanaians can remain confident that the regulation of crypto activities will not weaken the cedi, especially with the Central Bank maintaining control over the national currency and offering a safer digital alternative in the E-Cedi.
