Ghana’s central bank announces draft guidelines for crypto service providers

The Central Bank of Ghana has published draft guidelines for Virtual Asset Service Providers.

According to a draft by the Central Bank of Ghana dated August 16, there has been a surge in demand for cryptocurrencies in the country, leading to the need for regulations to address the various risks associated with the emerging asset class.

Ghana, like other southern African countries, has faced economic challenges, prompting residents to turn to alternative assets like Bitcoin (BTC) as a shield against inflation. As the bank explains in detail, growth has been spurred by a tech-savvy population, widespread internet access, and the rise of VASPs.

The central bank has proposed several key measures to regulate the sector, including stringent registration requirements, increased reporting obligations and compliance with global standards.

Under the draft law, VASPs will be required to comply with anti-money laundering and counter-terrorism financing regulations and report suspicious transactions to the Financial Intelligence Centre. Additionally, organisations will be required to conduct regular risk assessments and comply with the FATF’s Travel Rule, which requires reporting transaction details.

Once signed into law, VASPs will be required to register with the Bank of Ghana or the Securities and Exchange Commission, depending on the proposal. To provide services, such entities must demonstrate capital and solvency requirements as well as a “satisfactory internal control and risk management framework.” VASPs that fail to register within the specified timeframe will be deemed illegal.

The BoG plans to collaborate with other regulators to conduct a “trial testing process” with a controlled group of VASPs before fully implementing these regulations.

Meanwhile, financial institutions and commercial banks will only be allowed to transact for registered VASPs under certain conditions. Companies will not be allowed to directly interact with virtual assets or provide custody services.

The draft regulations are currently open for public feedback until August 31, 2024, after which they will be reviewed and possibly finalised.

The Bank of Ghana is also developing a central bank digital currency, the eCedi. It has partnered with German banknote and securities printing company Giesecke+Devrient to provide the basic infrastructure for the project.