Bank of Ghana (BoG) to Regulate Cryptocurrencies under New Law

The Bank of Ghana (BoG) plans to regulate virtual assets through a new “Virtual Assets Bill”, slated to take effect before December. This was announced by BoG Governor Johnson Asiama during the IMF/World Bank meetings in Washington, D.C.

According to Johnson Asiama, Ghana will begin regulating cryptocurrency before the year ends.  He said a bill governing virtual assets has been drafted with support from the IMF and is on its way to parliament.

Mr Johnson Asiama said: “Crypto is one area. We always knew that the phenomenon was there. But as you know, as some people say, crypto is like the air we breathe. It’s around us. It’s used around us, if you don’t engage in it, you don’t know it’s going on.”

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Why The Need For Cryptocurrency Regulation in Ghana

According to financial experts, there is a decline in remittances flowing through the formal banking system. Apparently because members of the diaspora shifted to alternative digital channels using stablecoins and other virtual assets.

Dr. Asiama highlighted that and said: “We saw the phenomenon at play when remittances suddenly reduced; apparently, the local currency had appreciated. And so therefore the diaspora that was sending the money, some of them, were getting lesser amounts in local currency terms. And so we saw a diversion by way of the channels of transmission. It was no longer going through the banks.”

To counter that, the legislation responds to growing use of crypto and stablecoins in remittances and informal exchange markets.

Moreover, BoG is also building institutional capacity new department, manpower and monitoring tools to enforce the upcoming law.

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“But I must say that passing a law is just one step in this process. Going down the road, the ability to monitor those flows will be key. Therefore, we are developing the expertise and we are developing the manpower. We are putting together a new department that will help us to regulate that area.” – Dr. Johnson Asiama said.

What BoG Aims To Achieve With This New Legislation

• Financial stability & oversight: Unregulated crypto flows can undermine monetary policy, FX control and financial integrity. Thus, BoG is signalling it can no longer ignore the phenomenon.
• Remittances & external flows: Remittances are a key part of Ghana’s foreign currency inflows. The shift to crypto for such flows may weaken the banking system’s visibility and control. Therefore, BoG wants to strengthen that aspect of the banking system.
• Market clarity: For Ghana’s crypto-industry, formal regulation offers legal clarity potentially encouraging compliant business models, but also increasing cost and oversight burdens.
• Investor & consumer protection: Obviously, without regulation, consumers face higher risk of fraud or loss. Therefore, formal oversight will provide a framework for safeguarding stakeholders.

Key Summary Points  – BoG Announces New Cryptocurrency Law

• Ghana’s central bank is stepping up to bring the crypto-asset space under formal regulation, aiming for implementation before December.
• Over recent months, BoG observed that remittances via banks had reduced and that local currency appreciation may have triggered a diversion of flows into crypto/alt-channels.
• Financial investigations revealed certain parallel market dealers were using stablecoins and virtual assets to facilitate cross-border transfers.
• After “a lot of work … in the past four months” BoG finalized a regulatory draft.
• The Virtual Assets Bill will now go to Ghana’s parliament; the expectation is for enforcement to begin “before the end of December”.
• Once the law is passed, BoG will have legal authority over virtual asset service providers (VASPs), crypto exchanges, and remittance services using crypto.