Bank of Ghana releases draft regulations aimed at establishing a framework for the crypto industry

Bank of Ghana has released a draft regulation aimed at establishing a framework for the cryptocurrency industry. These rules are designed to protect consumers, prevent financial crimes, and encourage financial inclusivity. Virtual asset service providers (VASPs) will be required to register and meet strict standards, while commercial banks will be prohibited from directly engaging in virtual asset business. The public has the opportunity to provide feedback on the proposed regulations before they are finalized. The Bank of Ghana (BOG) recently published a draft regulation aimed at establishing a regulatory framework for digital assets. The rule was released on August 16, with the goal of promoting financial inclusivity while protecting cryptocurrency users. The central bank's decision was made after a comprehensive analysis of digital assets such as Bitcoin (BTC) and stablecoins like USDT. The analysis found that with the increasing popularity of the internet and VASPs, more and more technically savvy people in Ghana are using digital assets. While the use of cryptocurrency is still low compared to traditional finance, the Bank of Ghana believes that regulation is necessary for the role of cryptocurrency in cross-border payments and remittances. These regulations aim to comply with international standards while addressing money laundering, fraud, and cybersecurity threats. In addition, VASPs must meet capital requirements and have internal control and risk management frameworks. The draft regulation clearly stipulates that commercial and registered financial institutions can only provide services to registered VASPs. No bank or financial institution can directly handle business related to virtual assets. Before finalizing the regulations, BoG will conduct a sandbox testing process to discover potential issues or improve the rules. It is reported that the public can submit feedback before August 31.