Crypto Regulation Advancement Proposed in Ghana Amidst Increasing Adoption
Ghana to Regulate Cryptocurrency Market, Boosting Financial Oversight and Attracting Investment
Ghana is set to introduce a regulatory framework for cryptocurrency trading platforms, marking a significant shift from earlier caution towards active formalization of the digital asset sector. This move comes as about 17% of Ghana's adult population, over three million people, are already engaged in cryptocurrency use.
The new framework, scheduled for finalization and submission to parliament by September 2025, will mandate registration, minimum capital requirements, consumer protection measures, anti-money laundering (AML) protocols, and enhance transparency within a market estimated at around $3 billion in annual transactions.
The Bank of Ghana aims to integrate cryptocurrencies into the mainstream financial system to better monitor and manage economic activity, improve financial data collection, curb fraud and money laundering, and attract investment. This regulatory initiative could position Ghana as a regulatory leader in West Africa.
The pending regulatory framework is designed to harness the growth of cryptocurrency within a controlled environment, allowing the central bank to better manage and understand the sector’s effects on liquidity, capital flows, and the broader monetary system.
The rise of cryptocurrency use in Ghana complicates the central bank's monetary policy, as the local currency, the Cedi, has experienced a 48% increase in the past year, following a 25% plunge the year before. The policy rate in Ghana is currently 28%, with inflation at 13.7% in June, making it the highest in 20 years.
However, the licensing framework could provide clearer rules, more investor protection, and better financial data collection, potentially boosting cross-border trade, attracting investment, and improving monetary oversight. Craig Stoehr, general counsel at stablecoin platform Yellow Card, believes that crypto can boost intra-African trade by sidestepping dollar liquidity issues.
Del Titus Bawuah, CEO of Web3 Africa Group, stated that it is in the interest of African authorities to mainstream cryptocurrency into their financial system for better oversight. Authorities in Ghana share this belief, as they believe that regulation will boost cross-border trade, attract investment, and improve monetary oversight.
If passed, Ghana's crypto bill could attract significant investment, as the country is projected to have $3 billion in cryptocurrency transactions from July 2023 to June 2024. Nigeria, Ghana's neighbour, currently boasts $59 billion in the same period.
Governor Johnson Asiama emphasized that Ghana is "late in the game" when it comes to regulating cryptocurrency and that it has implications for the local currency. Mainstreaming cryptocurrency into the financial system could help the central bank better manage these implications and position Ghana as a regional leader in digital asset regulation.
The new regulatory framework aims to attract investment and boost cross-border trade by integrating cryptocurrencies into Ghana's mainstream financial system, thereby improving monetary oversight. This integration will allow the central bank to better manage the effects of cryptocurrency on business activities, liquidity, and capital flows within the industry.
