VASPs in Ghana to apply for authorization once a regulatory framework is established. The Bank of Ghana (BoG) has issued draft guidelines proposing regulatory measures on digital assets, such as cryptocurrencies, seeking recommendations from industry players, experts, and the public by August 31, 2024, to determine the next steps forward.
Per the apex bank, this follows the need for regulatory clarity on digital asset activities and is subject to a satisfactory sandbox testing process. Moreover, the objectives of the proposed framework include fostering innovation while effectively managing risks associated with digital assets.
As detailed in the document, once a regulatory framework is in place, the bank will require all Virtual Asset Service Providers (VASPs) in Ghana to apply for authorization from the BoG or the Securities and Exchange Commission (SEC). Failure to register will be considered to be operating illegally in the country.
The central bank’s regulatory framework may focus on exchanges and platforms that provide services related to virtual assets, and the framework will define the types of assets covered and regulate interaction between financial institutions and VASPs.
Moreover, the BoG said it has considered the guidance and regulatory frameworks issued by bodies, including the Financial Action Task Force (FATF).
Meanwhile, in South Africa, the Financial Sector Conduct Authority (FSCA) is already investigating thirty cases of entities offering crypto services without authorisation, having begun accepting licence applications in 2023, approving 75 institutions to operate as Crypto Asset Service Providers (CASPs).
What the proposed framework entails
The proposed framework in Ghana will require VASPs to conduct customer due diligence, monitor transactions, and report suspicious activities. VASPs and exchanges, among other measures, must comply with the FATF’s Travel Rule.
Enhanced Payment Service Providers (EPSPs) will be able to process virtual asset transactions for registered VASPs, while commercial banks will be permitted to provide banking services to registered VASPs, with certain restrictions and conditions applying to both.
Meanwhile, Kenya also intends to enact new cryptocurrency trading laws, setting up a sectoral working group to create a policy document for a framework outlining what needs to be done and who will regulate digital asset providers.
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In June 2024, the BoG and the Monetary Authority of Singapore (MAS) completed the first proof of concept (POC) for Project DESFT (Digital Economy Semi-Fungible Token). The project, launched in 2023, aims to introduce solutions including Universal Trusted Credentials (UTCs), Central Bank Digital Currency (CBDC), stablecoins, and a trade marketplace.
In other news, the Bank of Ghana introduced a centralised online foreign exchange trading platform for secure and efficient operations in the foreign exchange market, effective August 1, 2024.
