Ghana’s central bank is working towards establishing regulations for cryptocurrency by December this year, following a similar legislative move by Kenya.
The Bank of Ghana (BoG) governor, Johnson Asiama, disclosed at the International Monetary Fund meetings in Washington that significant progress has been made over the last four months to create a conducive regulatory environment and associated legislation.
“That bill is on its way to parliament; hopefully by the end of December, we should be able to regulate cryptocurrencies in Ghana.”
Earlier this month, Kenya’s virtual asset service providers (VASP) bill passed on October 7, prompting Ghana to expedite its own regulatory framework.
Fundamental Steps Towards Regulation
While the BoG had initially set a deadline in September for the regulations, earlier drafts in August received public input. Asiama emphasized that creating laws is just a segment of the overall strategy, as the capability to monitor cryptocurrency transactions is crucial.
Asiama noted,
“Therefore, we are developing the expertise, we are developing the manpower. We are putting together a new department that will assist us. It is an important domain, and we can no longer ignore it,” he said.
Surprisingly, as much as 8.9% of Ghana’s 34 million population, equating to over 3 million individuals, engage with cryptocurrencies despite the absence of formal regulations.
Asiama explained that the increasing usage of crypto necessitated regulatory measures to avert potential abuses within the system. As part of this endeavor, the BoG is piloting a digital sandbox allowing select companies to experiment with cryptocurrency-related activities.
The Push for Regulation
Financial advisory expert Isaac Simpson, from Stanbic Bank Ghana, previously remarked that Ghana must catch up on regulations or risk being left behind in the digital finance arena.
“Inaction is a policy. And currently, our inaction is costing us: loss of tax revenue, exposure to illicit capital flows, stifled innovation, and a digital economy outside state control.”
The urgency for Ghana to create a robust cryptocurrency framework is becoming increasingly critical as other nations in the region advance their capabilities and regulations.
