Cryptocurrency is fast growing around the world and the trade of it is also fast growing in Ghana but there is no regulatory framework for it here yet. However, the Bank of Ghana has hinted that it’s recently launched Regulatory and Innovation Sandbox could be the panacea for crypto regulations in Ghana.
First Deputy Governor of the Central Bank, Dr. Maxwell Opoku-Afari dropped the hint when he opened a stakeholder forum for the BoG’s Regulatory and Innovation Sandbox in Accra.
In a speech read on his behalf by Kwame Oppong, Head of Fintech and Innovation at BoG, Dr. Opoku-Afari said with regards to developments in virtual assets, “we are open to dialogue geared towards the potential exploration of regulatory outcomes, keenly focused on consumer interest and protection. The Sandbox could potentially present us with these opportunities.”
This is the second time in days that the central bank has hinted of its readiness for dialogue on calls for the legalization of cryptocurrencies in Ghana. The first was by Kwame Oppong himself, at the recently held Africa Money and DeFi Summit in Accra.
It is estimated that crypto exchanges operating in Ghana account for more than 400% increase in crypto trade in the country over the last four years. And all this is outside of the remit of the regulated financial sector.
Whereas BoG is not the exactly opposed to crypto trade outside of the mainstream financial system, it has made it a practice to keep issuing public notices against any attempt by anyone to introduce actual crypto coins in Ghana.
The central bank has also warned all regulated financial institutions never to transact in crypto or facilitate any crypto transactions. The central bank says it needs to be clear on how to ensure financial stability and also protect consumers when crypto is mainstreamed.
But two key Ghanaian personalities – internet pioneer and Chairman of Ghana Dot Com, Prof. Nii Narku Quaynor and Minister of Communications and Digitalization Ursula Owusu Ekuful have recently made direct calls on the central bank to lead the way into crypto regulation and adoption in Ghana.
The first deputy governor however noted that the Central Bank continues to monitor developments in the virtual assets space on regular basis, and still stands by its many cautionary notices regarding cryptocurrency of the presence of “significant inherent risks.”
He noted whereas the central bank seeks to encourage innovation in the digital finance space, it believes that such innovations come with risks; and if not properly directed, could be disastrous to society.
“A laissez-faire attitude to innovation and financial service delivery is therefore an unsuitable approach to accommodate,” he said.
Meanwhile, as part of the Regulatory Sandbox Programme, the central bank has made room for blockchain innovations to be tested within that environment, all in the spirit of finding ways to properly regulate blockchain and its related technologies like crypto, DeFi (decentralized finance) and NFTs (non-fungible tokens).
The Regulatory Sandbox Stakeholder Engagement was attended by financial service providers, FinTech startups and other financial sector regulators in a bid to adopt a collaborative approach towards growing and properly regulating innovations in the financial sector.
“The boundaries of financial service are becoming increasingly blurred, and therefore behooves regulators and other technical and professional institutions to collaborate to promote a safe and efficient financial service industry,” he stated.
According to him, digital finance is largely responsible for Ghana’s recent remarkable performance in financial inclusion from 58% in 2017 to 68% in 2021 as reported in the 2021 Global Findex, saying that although that achievement is worth celebrating, a lot more remains to be achieved.
He is of the opinion that the meeting the changing needs of customers and addressing the challenges thrown up by digitalization of the financial sector calls for pragmatic and innovative solutions, which the central bank considers a shared responsibility of the regulator and the innovators to create a conducive environment for experimentation.
Dr. Opoku-Afari also used the occasion to reassure stakeholders and innovators that any innovation put in the Regulatory Sandbox is safe and protected by oath.
“The Bank of Ghana as a regulator of financial service maintains the highest level of confidentiality and secrecy. For this reason, your participation in the Bank’s Regulatory Sandbox will not expose your ideas to third parties. We would like to assure you that every staff is committed to an oath of secrecy and under no circumstance will third party information be disclosed. A breach of the secrecy requirement attracts serious sanctions including dismissal,” he said.