Regulatory push from Bank of Ghana demands Virtual Asset Service Providers (VASPs) to register, intensifying regulatory measures

Regulatory push from Bank of Ghana demands Virtual Asset Service Providers (VASPs) to register, intensifying regulatory measures

Ghana is taking steps to formalize the regulation of cryptocurrencies and virtual assets, with the Bank of Ghana (BoG) leading an initiative to license and regulate Virtual Asset Service Providers (VASPs) starting September 2023. This shift marks a move from previous caution to structured oversight, aimed at managing growing digital asset adoption, protecting consumers, and stabilizing the financial system.

The BoG has released an exposure draft proposing licensing requirements, anti-money laundering safeguards, consumer protection rules, and minimum capital thresholds for crypto exchanges and wallet providers. A draft Virtual Asset Providers Act is under review and expected to be submitted to parliament by September 2023, which will provide legal authority for enforcement and supervision of crypto operations.

The move responds to rapidly increasing crypto use in Ghana. According to the BoG, about 3 million Ghanaians (17% of adults) actively use cryptocurrencies for payments, remittances, and investments, with $3 billion transacted over the past year. The lack of regulation in the past has distorted national economic data and complicated monitoring of capital flows, emphasizing the need for formal oversight to ensure financial stability and manage currency volatility.

The registration exercise is aimed at shoring up imminent crypto regulations in Ghana. The BoG has asked virtual assets service providers (VASPs) in Ghana to register with it by August 15. The registration is not for issuing official licenses, but to identify and assess companies that engage in digital asset services. The BoG's intention is to align crypto regulations in Ghana with global standards.

It is important to note that the VASP act has not yet been passed by Ghana's lawmakers. Failure to comply with the registration process may result in sanctions and potential disqualification from any eventual licensing initiative. Companies required to register include cryptocurrency exchanges, wallet providers, payments companies utilizing digital assets, and projects looking to issue initial coin offerings and token sales.

The implementation of these crypto rules is contingent on the passage of the VASP act by the country's lawmakers. The Securities and Exchange Commission (SEC) of Ghana announced the establishment of a task force to help regulate crypto assets in December 2022. The BoG's move is in furtherance of its commitment to promote innovation and protect the country's citizens as they navigate the financial ecosystem.

[1] GhanaWeb. (2023). BoG to regulate cryptocurrency by September 2023. Retrieved from https://www.ghanaweb.com/GhanaHomePage/business/BoG-to-regulate-cryptocurrency-by-September-2023-1794641 [2] Joy Online. (2023). BoG to regulate cryptocurrency by September 2023. Retrieved from https://www.myjoyonline.com/business/2023/July-12th/bog-to-regulate-cryptocurrency-by-september-2023.php [3] B&FT Online. (2023). Bank of Ghana to regulate cryptocurrency by September 2023. Retrieved from https://www.bftonline.com.gh/business/bank-of-ghana-to-regulate-cryptocurrency-by-september-2023/ [4] Modern Ghana. (2023). BoG to regulate cryptocurrency by September 2023. Retrieved from https://www.modernghana.com/news/1105033/bog-to-regulate-cryptocurrency-by-september-2023.html

1. The Bank of Ghana (BoG) will regulate cryptocurrencies and virtual assets starting September 2023, aiming to manage growing digital asset adoption, protect consumers, and stabilize the financial system in Africa.
2. The BoG has proposed licensing requirements, anti-money laundering safeguards, consumer protection rules, and minimum capital thresholds for crypto exchanges and wallet providers in Ghana, as part of the move towards structured oversight.
3. About 3 million Ghanaians (17% of adults) use cryptocurrencies for payments, remittances, and investments, with over $3 billion transacted in the past year, highlighting the need for formal regulation to ensure financial stability and manage currency volatility.
4. The BoG's intention is to align crypto regulations in Ghana with global standards, emphasizing its commitment to promote innovation and protect the country's citizens as they navigate the digital asset and finance technology sector.

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