Dr Ernest Addison, the Governor of Bank of Ghana (BoG), has disclosed that the central bank will develop a comprehensive framework to regulate the digital asset industry and crypto currencies in the country.
According to the Governor of BoG, the move is in line with the growing interest and patronage of the public in digital and virtual assets, popularly called crypto currencies.
Dr Addison noted that Ghana is facing the reality with cryptocurrencies. He said “having dominated global headlines for both innovation and calamity, crypto currencies are gaining grounds on the African continent”.
“Given the recent trends, the BoG initiated processes to actively study and monitor cryptocurrency and related technologies and models such as blockchain, decentralised finance and stablecoins. The bank has subsequently gained institutional understanding of the concepts, monitored global market developments, and reviewed several regulatory and global standards setting bodies across various jurisdictions, including the Financial Action Taskforce, Financial Stability Board, the Basel Committee on Banking Supervision.
“In all these, the clearest takeaway for the bank is the fact that, crypto currencies are digital assets and not currency, and in as much as cryptocurrency is associated with other key risks including volatility, cyber-theft, loss of funds with potential threat to financial stability, an outright ban of cryptocurrency has proven ineffective, mainly due to its decentralised and borderless nature.”
Dr Ernest Addison
Allowing Blockchain in Regulatory Sandbox
Consequently, Dr Addison disclosed that the bank intends to continue to allow blockchain in the regulatory sandbox, as the first step while it continues to explore a comprehensive regulatory framework for the digital asset industry.
Dr Addison stated, notwithstanding the decision to develop a regulatory framework for cryptocurrency assets, the bank still stands by its caution statements to the public on the dangers associated with cryptocurrency transactions as contained in several notices issued in the past.
“Interested parties need to be wary about potential losses that could occur when trading in crypto currencies. The bank equally stands by its directive as per the Notice issued on March 9, 2022, that all licensed institutions including banks, specialised deposit-taking institutions, dedicated electronic money issuers and payment service providers should refrain from facilitating cryptocurrency transactions via their platforms or agent outlets.”
Dr Ernest Addison
On the growing cyber security threat in the country, the Governor noted that as online business transactions grow, so is the incidence of cyber-attacks, and mobile money and Automated Teller Machine frauds. He noted that to forestall such activities from becoming embedded and weakening the digitisation drive, the bank established a Financial Industry Command Security Operations Centre (FICSOC) in 2018.
“In this regard, the bank has worked closely with the industry to complete a state-of- the-art FICSOC infrastructure, which is expected to be fully operational in the first quarter of 2023.”
Dr Ernest Addison
The FICSOC, the Governor said would assist with identifying threats in the banking sector through proactive monitoring, strengthening the cybersecurity posture of member institutions, sharing cybersecurity threat intelligence to improve resilience and incident management, and conducting digital forensic investigation where necessary.
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