The Bank of Ghana (BOG) has issued draft guidelines proposing a regulatory framework for digital assets in Ghana. In proposing these guidelines the BOG aims to foster a collaborative approach towards the regulation of digital assets to ensure sustainable development and innovation while promoting financial stability through the effective management of risks such as money laundering, fraud, cybersecurity risks and consumer protection issues associated with digital assets.

Proposed Regulatory Framework

To provide regulatory clarity on digital assets, the BOG’s regulatory approach is targeted towards exchanges and other platforms selling and otherwise trading in digital assets. The BOG therefore plans to develop a comprehensive framework, pending successful sandbox testing with select Virtual Asset Service Providers (VASPs), in collaboration with other relevant regulatory bodies.

• Regulation of VASPs will cover specific services to address money laundering, terrorism financing, consumer protection, and other measures deemed necessary by the BOG. VASPs will be required to conduct customer due diligence, monitor transactions, and report suspicious activities to the Financial Intelligence Centre (FIC);

• In preventing and reporting financial crime, VASPs would be required to conduct comprehensive risk assessments and implement a risk-based approaches

• Informed by the specific mandates of both the BOG and Securities and Exchange Commission (SEC), the 2 will collaborate to create distinct yet complementary regulatory frameworks for various digital asset applications and use cases;

• Commercial banks will be allowed to provide banking, payment, and settlement services exclusively to registered VASPs.

• Once the regulatory framework is established, it will be illegal for VASPs to operate in Ghana without first obtaining authorization from the BOG or SEC, based on their product offerings.

Potential Registration Requirements

These may include

• Detailed company profile with governance & ownership structure as well as audited financials;

• Satisfactory internal control and risk management frameworks;

• Registration and office address in Ghana;

• • Technology stack, asset storage, consumer protection, cybersecurity, and data privacy policies.

  • Specified minimum capital and solvency requirements

  Conclusion

  Ghana’s digital asset landscape is rapidly evolving, with growing interest and adoption of crypto assets and blockchain technology. The BOG, in collaboration with stakeholders, will continue to explore the potential of blockchain to transform the financial services ecosystem in Ghana. The BOG has called on stakeholders to provide feedback on the draft guidelines by 31^st August 2024, to help shape a balanced and effective regulatory framework.