The Bank of Ghana (BOG) and the Monetary Authority of Singapore (MAS) have successfully completed a proof-of-concept for the Digital Economy Semi-Fungible Token (DESFT) Project, according to a local report.
This marks the successful execution of a cross-border transaction payment making use of digital credentials, the eCedi CBDC and an approved stablecoin from Singapore. The project aims to promote trade between micro, small, and medium enterprises (MSMEs) in both countries.
Within the project, live transactions have been carried out between the sides. To do so, they leveraged the Universal Trusted Credentials semi-fungible token protocol developed by the United Nations Development Program.
A stablecoin pegged to the Singapore dollar (XSGD) and the BoG’s e-Cedi central bank digital currency (CBDC) were used for exchange within a Purpose Bound Money protocol on a distributed ledger.
According to Kwame Oppong, the Director, Fintech And Innovation Office, Bank of Ghana, while speaking at the launch of Completion Of Cross-Border Trade Using Digital Credentials, said the BoG launched Project DESFT in June 2023 in collaboration with the Monetary Authority of Singapore (MAS).
The first phase of the project saw the design and development of a trusted credential system that enables SMEs to transform key information.
These credentials include basic credentials, licenses, certificates, and trade records, all of which are transformed into verifiable digital credentials on a secure distributed ledger system. This facilitates potential trade partners and financial institutions in efficiently verifying the authenticity of such information.
Oppong said that in April 2024, Phase 2 of the project, a cross-border trade between Ghana and Singapore, leveraging the DESFT solution, Universal Trusted Credentials (UTC), the Singapore Stablecoin, the eCedi, and the Purpose Bound Money protocol took place.
Project DESFT aims to assist SMEs in Africa in participating in international trade by addressing significant obstacles they encounter. These obstacles include establishing trust with overseas trade partners and obtaining assistance in cross-border payments and supply chain finance.
“We believe that the new generation of financial technology offers innovative approaches to these challenges. After nearly a year and two phases of development, we have crafted a reliable information exchange solution founded on UTC standards and Semi-fungible Token technology,” he said.
The next phase of the project will build upon the current achievements, focusing on highly automated digital credential processes, programmable payments across multiple digital currencies, and support for supply chain finance.
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