Ghana Proposes Stricter Regulations for Virtual Asset Providers Amid Crypto Boom

• Bank of Ghana proposes strict regulations for VASPs to prevent financial crime.
• New regulations require VASPs to acquire authorization or risk being considered illegal.

As demand for crypto increases in Ghana, the Bank of Ghana (BOG) has released draft rules for Virtual Asset Service Providers (VASPs). This action seeks to promote innovation in the field of digital assets while reducing risks related to money laundering and the funding of crime.

Many Ghanaians are using cryptocurrencies like Bitcoin as a hedge against inflation as a result of the country’s growing economic difficulties. The Bank of Ghana credits the expansion of VASPs combined with a population that is tech-aware and has broad access to the internet for this rise.

BoG Targeting to Strengthen Crypto Exchange

The proposed regulations require VASPs to register with the Bank of Ghana or the Securities and Exchange Commission, depending on their services. These organizations must exhibit strong internal controls, follow anti-money laundering (AML) and counter-terrorism financing (CFT) legislation, and comply with the Financial Action Task Force’s (FATF) Travel Rule.

Financial institutions will be limited to handling transactions for registered VASPs and will not be permitted to directly handle virtual assets or provide custody services. The draft guidelines are accessible to public feedback until August 31, 2024.

In addition to engaging with the Securities and Exchange Commission (SEC) and other external competitors, the BoG intends to compel VASPs to go through sandbox testing before providing services in Ghana.

The Bank of Ghana is additionally collaborating with German firm Giesecke+Devrient to advance its central bank digital currency, the eCedi, as part of a larger drive to upgrade the country’s financial system.