Earlier this month, the Bank of Ghana (BoG) announced partnering with the banking infrastructure provider EMTECH Solutions to launch a 12-week hackathon on its central bank digital currency (CBDC), the eCedi. According to BoG, the hackathon is part of its research project, calling for local developers to participate and create real-world use cases compatible with the eCedi’s design.
Last Friday, the BoG and EMTECH held an information session to provide more details about the hackathon. Here are a few takeaways from the session:
The eCedi is built on Hedera Hashgraph
Last year, a representative of the BoG said the eCedi would not be built on blockchain technology but on an unnamed fabric. BoG has now confirmed that the eCedi is developed on the Hedera Hashgraph network.
Hedera is a decentralized and open-source proof-of-stake (PoS) distributed ledger technology described as an alternative to blockchains. Hedera supports any language that compiles to the Ethereum mainnet, including Solidity and Vyper.
In contrast to the eCedi, Nigeria’s CBDC — the eNaira — is built on the more commonly used blockchain-based Hyperledger Fabric.
eCedi hackathon to last until Dec. 15
The eCedi hackathon started accepting registrations on Oct. 6. The program will span 12 weeks, ending with an awards ceremony for the winners of the hackathon on Dec. 15. Submission of concept notes has been extended till Oct. 23 while the initial selection process will be held on Oct. 27.
Participants who make it through the first stage will compete in a pitch session on Nov. 3. A second selection round will take place on Nov. 8. Participants who make it through the second stage of selections get a 21-day window to build prototypes of their solutions and present demos on Dec. 8 before the finals on Dec. 13.
Proposed products to be built around nine eCedi use cases
The Bank of Ghana announced that while anyone could participate in the hackathon individually or in groups, solutions would only be welcomed in nine specific categories.
The categories include consumer-to-business transactions, government payments and disbursements, agriculture and trade, data privacy, inbound remittance and combating illicit transactions. In addition, use cases for the eCedi’s interoperability with existing payment systems, know-your-customer models and possible products for cross-border payments and transactions are welcome during the hackathon.
Per the bank, the intellectual property of the ideas created for and during the hackathon belongs to the creators, not the bank.
The eCedi is token-based
The BoG further clarified that the eCedi is token-based, unlike the account-based model employed by other CBDCs such as the eNaira. This means that eCedi is in the form of tokens that can be stored locally on a phone or a card and not in accounts held by the central bank or designated intermediaries.
The BoG mints eCedi and distributes it to third parties, such as banks and merchants, which in turn distribute the CBDC to consumers. The bank added that eCedi wallets are also designed to be fully available offline.
In a token-based CBDC, the digital currency is stored in a digital wallet and transferred between wallets without an intermediary.
- The digital currency is represented by a unique token that can be transferred from one wallet to another. The token is verified for authenticity, just like physical banknotes.
In an account-based CBDC, the digital currency is stored in an account with a central bank.
- Transactions are processed through a centralized payment system controlled by a trusted party. The identity of the payer and whether they hold an account must be verified, just like with credit cards