Ghana Makes Milestone Cryptocurrency Move
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Loading... - Fred Owusu
- 12 Sep 2024
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Ghana's draft guidelines for digital assets aim to regulate the digital assets space, promoting innovation in the financial market while mitigating potential risks associated with crypto assets, such as money laundering and terrorism financing. The guidelines, published by the Bank of Ghana, follow years of the bank's 'wait and see' approach regarding crypto assets, with the regulator only last June reiterating its prohibition on the use of cryptocurrencies in all financial transactions.
The proposed rules allow Ghanaians to utilize popular cryptocurrencies, including Bitcoin and Ether. However, banks and payment service providers are still banned from engaging in crypto asset transactions until the formal guidelines come into force. The digital asset landscape in Ghana is evolving, with increasing interest and adoption of crypto assets and blockchain technology, supported by a growing number of exchanges and initiatives in the country's financial ecosystem.
The guidelines pay particular attention to virtual asset service providers (VASPs), proposing several measures to regulate these platforms and exchanges. VASPs would be required to perform customer due diligence and transaction monitoring, report suspicious transactions to the Financial Intelligence Centre (FIC), conduct comprehensive risk assessments, and implement a risk-based approach in preventing financial crime in line with international best practices.
Amanda Clinton, founding partner at Ghana-headquartered law firm Clinton Consultancy, welcomes the proposed guidelines but highlights areas of concern, including stringent licensing requirements or capital adequacy norms that may stifle innovation and discourage entry. Bank of Ghana also needs to ensure VASPs implement robust cybersecurity measures to address cyber threats. The guidelines should also be flexible enough to adapt to future technological advancements, while clear demarcation between the BoG and SEC's regulatory scope is crucial for avoiding confusion.
The final rules should also address data privacy concerns relating to user information collected by VASPs, and provide clear tax regulations for digital asset transactions to promote transparency and compliance. Ghana's softening attitude towards crypto assets follows in the footsteps of other African countries such as Nigeria, which last year offered legitimacy to the cryptocurrency sector by issuing its own VASP guidelines.
