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Sunday, December 5, 2021

Data privacy must be at the fore of digital currency policy – Julian Opuni

Businesses continue to digitalise their operationsBusinesses continue to digitalise their operations

To guarantee widespread adoption and consequent success for the impending local central bank-issued digital currency, the e-cedi, privacy concerns expressed by consumers must be addressed by the issuer and relevant stakeholders – both in word and deed – Managing Director of Fidelity Bank, Julian Opuni, has said.

Speaking ahead of his participation as a discussant at the 2021 edition of the Ghana Economic Forum (GEF 2021), which has as its theme ‘Strengthening Homegrown Policies to Underpin the National Digitisation Drive and Shared Financial Prosperity’, Opuni said despite its well-documented benefits – including the cost of managing and transferring money, increased financial inclusion, as well as a reduction in tax evasion, money laundering and related activities – protection of consumer data must be at the fore of its implementation.

Speaking to the B&FT on a number of issues centred around the Ghana Banking Code of Ethics and Business Conduct, which was recently introduced by the Chartered Institute of Bankers (CIB), he suggested that the foray into unchartered waters must be led by robust regulation to inspire public confidence.

This comes as a section of consumers have expressed data privacy as their chief concern when confronted with the prospects of a Central Bank Digital Currency (CBDC).

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“The imminent explosion of digital currency initiatives in Ghana further underscores the need for our regulator and other key stakeholders to be proactive in ensuring that the digital currency space is carefully regulated.

“As people gradually begin to adopt digital currencies, one of the critical issues that need to be addressed is access to data. We must determine how much disclosure is appropriate vis-à-vis data protection considerations such as the General Data Protection Regulation (GDPR).”

He further stated that as businesses continue to digitalise their operations, processes and products, there is a need to “lock in all these regulations to secure the integrity of customer data and avoid breaches”.

Mr. Opuni also commended the financial sector watchdogs – the Securities and Exchange Commission (SEC) and Bank of Ghana (BoG) – for their respective and collaborative efforts in providing comprehensive regulatory frameworks which are cognisant of rapid developments disrupting the status quo and ushering-in the so-called Money 2.0, while ensuring guardrails are in place to prevent unintended spillovers.

“I am glad to note that the SEC and BoG are working in tandem to streamline and regulate digital currencies in Ghana.

“I believe it would be apt for our financial intelligence unit and law enforcement agencies to also lend their expertise to this cause and aid the SEC and BoG implement a tight regime for the roll-out of locally relevant digital currencies,” he remarked.

Global developments

Despite not being a new phenomenon, CDBCs have gained much traction over the past 18 months due to the accelerated pace of digitalisation occasioned by the prevailing pandemic.

A report published in June this year by audit and tax advisory leader KPMG, titled Central Bank Digital Currencies and the Future of Money, cited the Bank for International Settlements as saying: “85 percent of the central banks in the world are currently either studying or piloting CBDCs”.

The phenomenon was given further credence recently, when the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva – while describing CBDCs as ‘reliable’, revealed that according to a survey conducted by her outfit, at least 110 countries are at some stage of creating and exploring their own CBDCs.

West African neighbour Nigeria, which is spearheading the CBDC drive alongside Ghana on the continent, has delayed the launch of its e-naira digital currency – initially planned for October 1 – “due to other key activities lined up to commemorate the country’s 61st Independence Anniversary”.

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