Ghana’s central bank has released draft guidelines for Virtual Asset Service Providers (VASPs). The Bank of Ghana’s draft from August 16 highlights the increasing demand for cryptocurrencies within the nation, necessitating regulations to address associated risks.

Ghana, similar to other South African countries, has faced economic challenges, leading residents to turn to alternative assets like Bitcoin to protect against inflation. This trend has been fueled 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:

  • Stringent registration requirements
  • Enhanced reporting obligations
  • Compliance with global standards

According to the draft law, VASPs will need to adhere to anti-money laundering and counter-terrorism financing regulations, and report suspicious transactions to the Financial Intelligence Centre. Additionally, they must conduct regular risk assessments and comply with the FATF’s Travel Rule, which necessitates reporting transaction details.

Once signed into law, VASPs will be required to register with either the Bank of Ghana or the Securities and Exchange Commission, depending on their services. To operate, these entities must demonstrate a satisfactory internal control and risk management framework, along with meeting capital and solvency requirements. Failure to register within the specified timeframe will result in the entity being deemed illegal.

Before fully implementing these regulations, the Bank of Ghana plans to collaborate with other regulatory bodies to conduct a “sandbox testing process” with a controlled group of VASPs. Financial institutions and commercial banks will be permitted to process transactions for registered VASPs under specific conditions but will not be allowed to interact directly with virtual assets or provide custody services.

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

In addition to these measures, the Bank of Ghana is developing its central bank digital currency, the eCedi. To provide the base infrastructure for this project, it has partnered with Giesecke+Devrient, a German banknote and securities printing company.

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