As a seasoned researcher who has witnessed the rapid evolution of financial systems across various continents, I find it fascinating to observe Ghana’s proactive approach towards regulating its emerging virtual asset sector. The country’s economic challenges and the subsequent shift towards alternative assets like Bitcoin by its residents is a testament to their resilience and adaptability.
Ghana’s central bank has published draft guidelines for Virtual Asset Service Providers.
Based on a draft released by the Bank of Ghana on August 16th, there’s been a surge in the desire for cryptocurrencies within the country. This increase has highlighted the necessity for regulations to manage the risks commonly found when dealing with this new type of financial asset.
In similar fashion to other nations in Africa, including South Africa, Ghana has faced economic hurdles, causing its residents to seek refuge in alternative investments such as Bitcoin (BTC) to protect themselves from inflation. This expansion can be attributed to a tech-inclined populace, widespread internet connectivity, and the proliferation of Virtual Asset Service Providers (VASPs).
The central bank suggested some important steps for controlling the industry, such as tough registration conditions, increased reporting duties, and adherence to international norms.
According to the proposed legislation, Virtual Asset Service Providers (VASPs) will need to follow anti-money laundering and counter-terrorist financing guidelines, report any suspicious transactions to the Financial Intelligence Centre, perform routine risk evaluations, and adhere to the FATF’s Travel Rule by disclosing transaction details.
As a crypto investor in Ghana, I understand that Virtual Asset Service Providers (VASPs) will be required to comply with specific regulations once they are enacted into law. This means these entities must register with either the Bank of Ghana or the Securities and Exchange Commission, depending on their offerings. To legally operate, VASPs need to present a robust internal control and risk management system that meets the standards set, in addition to meeting capital and solvency requirements. Failure to register within the stipulated timeframe will render these providers illegal in the eyes of the law.
Prior to rolling out these regulations, the Bank of Ghana intends to work together with other regulatory entities for a “trial run” or “test phase”, known as a sandbox testing process, involving a limited number of Virtual Asset Service Providers (VASPs).
In this scenario, financial entities like institutions and commercial banks are restricted to handling transactions exclusively for registered Virtual Asset Service Providers (VASPs), subject to certain terms. These entities are not permitted to engage in direct dealings with virtual assets or offer storage solutions for these assets themselves.
The public has until August 31, 2024, to provide feedback on the proposed rules. After this date, the regulations will be assessed, possibly leading to their formal approval.
The Bank of Ghana is working on creating its own digital version of the cedi, known as the eCedi. To establish the necessary foundation for this endeavor, they have joined forces with Giesecke+Devrient, a reputable German firm specializing in banknote and security document printing.
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2024-08-16 13:41