Ghana moves to regulate crypto as usage soars to $3 billion

Ghana is preparing to introduce its first regulatory framework for cryptocurrency as usage of digital assets in the country surges to $3 billion. The Bank of Ghana (BoG) is expected to present a bill to parliament in September to oversee and regulate digital asset exchanges.

BoG Governor Johnson Asiama said the main objective is to bring virtual currencies into the mainstream economy. He emphasized that the move would help the country collect reliable economic data, enhance transparency, attract investment, and generate revenue for the national budget.

Asiama admitted they are now playing catch-up, noting that many Ghanaians already use cryptocurrencies to send and receive payments. However, most of these transactions remain invisible to regulators, making it difficult to measure the full scope of the country’s economic activity.

According to Asiama, integrating crypto into the formal financial system is now critical, as millions of Ghanaians have already adopted it daily.

The proposed bill will outline operational standards for digital asset platforms, detail consumer protection mechanisms, and establish tax obligations. It is also expected to strengthen financial oversight amid increasing concerns over money laundering and cross-border fraud.

Ghana’s move reflects a broader trend across Africa, where governments are waking up to the reality that cryptocurrency is more than a passing trend. By licensing crypto platforms, Ghana hopes to tap into one of the fastest-growing sectors of its digital economy.

Regulators target currency stability

Ghana’s move to regulate cryptocurrency could also stabilize the Ghanaian cedi in the longer term, as the local currency has exhibited extreme volatility in recent years. The currency has appreciated by 48% in the last 12 months. But the increase came after it posted a steep drop of 25% in the preceding year, underscoring its volatility.

This unpredictability makes monetary policy more challenging, particularly for Ghana, which heavily relies on imports. According to officials, regulating crypto would help the central bank better forecast and steer inflation.

Governor Asiama explained that some of the capital flows in and out of the economy through cryptocurrencies were not captured in the country’s official data. He said this limited the central bank’s ability to make accurate economic decisions and impacted the cedi’s value.

Now Ghana has a benchmark interest rate of 28%, and inflation fell to 13.7% in June. This wide differential indicates underlying economic dislocations that the BoG aims to alleviate with better data collection and financial inclusion.

Ghanaians and Nigerians lead surge in crypto use

Web3 Africa Group’s chief executive officer, Del Titus Bawuah, said about 3 million Ghanaians — or 17% of all adults in the country — use virtual currencies. This includes Bitcoin, Ethereum, and stablecoins like USDT.

Bawuah said the data showed that Ghanaians used cryptocurrencies for much more than just investment. He noted that people are paying for everyday services, sending money, and running businesses with crypto. He emphasized that it is no longer a niche trend but has become mainstream.

According to Bawuah, traded crypto transactions in Ghana totaled $3 billion between July 2023 and June 2024. Nigeria recorded an even higher volume at $59 billion in crypto trades during the same period. Nigeria represents about half of sub-Saharan Africa’s $125 billion crypto volume.

Observers say one reason for the boom is a lack of faith in the traditional banking system, and a difficulty getting hold of U.S. dollars. Crypto is a solution, at least for cross-border payments and e-commerce. Crypto could also help to improve regional trade by circumventing currency exchange barriers, said Craig Stoehr, general counsel at pan-African stablecoin payments platform Yellow Card.