Amid global pressure to regulate crypto, West African country Ghana has created new rules for this emerging financial sector.

According to the document published earlier today, the Bank of Ghana (BoG) has now taken action to establish a regulatory framework for cryptocurrencies such as Bitcoin and Tether. A set of draft guidelines have been presented to strengthen the supervision of digital assets.

The document reveals that this development is a continuation of an evaluation conducted over the past three years and reflects the country’s increasing involvement in cryptocurrencies.

Regulations in the making

The proposed regulations mark a significant milestone in Ghana’s journey to embrace the cryptocurrency sector. The central bank is now actively seeking input from both public and industry stakeholders to refine and finalize the regulations. The document read:

This is in line with the Bank’s commitment to continuously create a favourable regulatory environment that promotes financial inclusion and enhances financial stability.

Notably, the BoG’s draft guidelines introduce an eight-pillar framework designed to address various risks associated with digital assets, such as money laundering, terrorist financing and consumer fraud.

Central to this regulation is the “improvement” of registration and reporting protocols for crypto exchanges and other virtual asset service providers (VASPs).

Under the new rules, exchanges must implement “strong” mechanisms to monitor and report suspicious transactions, in line with the Financial Action Task Force’s Travel Rule.

Guiding the Crypto Sector in Ghana

Additionally, the proposed regulations would require all crypto exchanges to undergo a “thorough registration process” with the BoG and participate in sandbox testing before being allowed to operate.

According to the draft, this step is crucial to ensure that all market players adhere to the “highest standards of safety and operational integrity”.

The BoG’s collaboration with external bodies, including commercial banks and offshore regulators, aims to create a coherent regulatory framework that supports the growth of the digital economy while protecting stakeholders.

The feedback period, which will be open until August 31, will provide an opportunity for industry experts, crypto enthusiasts and the general public to help shape Ghana’s digital currency regulations. The BoG noted in the document:

The Bank values ​​the perspectives and recommendations of industry players, experts and the public regarding the proposed regulatory measures described in this document. (…) The Bank will consider this input in determining the next steps forward.

It is important to note that this consultation period is crucial for the country’s crypto market as it is likely to influence the final regulatory structure, both negatively and positively, as well as its implementation.

Main image created with DALL-E, chart from TradingView