Cryptocurrency Regulations Encourage Innovation and Attract Investments, Claims Gillian Darko of YellowCard
Ghana is set to take a significant leap forward in formalizing its digital finance landscape, with the Bank of Ghana announcing plans to introduce a comprehensive regulatory framework for cryptocurrencies. This move, expected to be rolled out by September 2025, positions Ghana as a potential digital finance hub in Africa.
The proposed Virtual Asset Service Providers Act is at the heart of this regulatory shift. Advocated for by Yellow Card, a major digital asset platform, the Act aims to encourage fintech innovation, increase investor and consumer trust, foster financial inclusion, and align Ghana with regional peers like Nigeria and South Africa.
The Act includes several key elements:
- Licensing and Registration: Virtual Asset Service Providers (VASPs) such as crypto exchanges and wallet providers must register with the Bank of Ghana and obtain a license to legally operate, providing regulatory oversight.
- Anti-Money Laundering (AML) and Know Your Customer (KYC) Compliance: Strict AML/KYC procedures are enforced to curb money laundering, fraud, and other illicit activities.
- Consumer Protection Measures: The Act includes provisions to protect users and investors, ensuring transparency and accountability from crypto service providers.
- Cybersecurity and Regular Audits: Licensed VASPs will be required to maintain strong cybersecurity standards and undergo routine audits to safeguard customer data and assets.
- Minimum Capital Requirements: Platforms must meet a minimum capital threshold (around 5 million Ghanaian cedis) to ensure financial stability and credibility.
- Monitoring and Integration into the Financial System: Licensing enables the Bank of Ghana to monitor payments effectively, support inflation targeting, stabilize the national currency (cedi), and integrate crypto activities into the broader financial ecosystem.
- Tax Obligations and Reporting: Digital asset providers will have obligations related to taxation and must maintain required reports to enhance transparency.
The regulatory framework also advocates for proportional compliance obligations tailored to the size and risk of firms, mechanisms for continuous stakeholder engagement, and the importance of ensuring the regulations are future-proof and inclusive.
Dr. Asiama, the Governor of the Bank of Ghana, revealed that the central bank is working towards launching the regulatory regime by the third quarter of 2025. Gillian Darko, Chief of Staff and Director of Strategy at Yellow Card, considers the regulation as a significant and welcome development.
Data from Chainalysis and other platforms show that crypto adoption is rising in Ghana for real-world use cases, particularly in remittances and inflation hedging. Stablecoins and other digital assets are already being used in Ghana for managing currency risk and facilitating cross-border payments.
Ms. Darko, Yellow Card's Director, emphasized the need for clearly defined asset classifications in the final framework. She also stressed the importance of ensuring the regulations are future-proof and inclusive.
The Bank of Ghana's decision to move ahead with regulation reflects a broader continental trend among African central banks grappling with digital finance opportunities and risks. Ghana's latest policy stance signals its intention to be at the forefront of this evolution.
This regulatory shift comes as many FinTech companies have spent the last few years preparing for the regulatory shift by enhancing compliance protocols and risk management systems. As Ghana steps into the digital finance era, it is poised to unlock innovation and investment in its FinTech ecosystem.
In adherence with the proposed Virtual Asset Service Providers Act, Ghanaian fintech companies are enhancing their compliance protocols and risk management systems in anticipation of the impending regulatory shift. This regulatory framework, aimed at formalizing Ghana's digital finance landscape, encourages investing in technology and fosters business growth, positioning Ghana as a potential hub for digital finance in Africa.
