BoG to develop framework to regulate crypto currency – Dr. Addison

The Bank of Ghana (BoG) is to develop a comprehensive framework to regulate the digital asset industry, Governor, Dr Ernest Addison, has said.

The move, he said, was in line with the growing interest and patronage of the public in digital and virtual assets, popularly called crypto currencies.

Dr Addison disclosed this at the Chartered Institute of Bank­ers Ghana 2022 Annual Bankers’ Dinner Day held in Accra last week dubbed Governor’s Dinner Day.

Dr Addison who delivered the keynote address said having dom­inated global headlines for both innovation and calamity, crypto currencies were 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,” the Governor stated.

“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.

Consequently, the bank intends to continue to allow blockchain in the regulatory sandbox, as the first step while we continue to explore a comprehensive regulatory frame­work for the digital asset industry, Dr Addison stated.

He said notwithstanding the decision to develop a regulatory framework for cryptocurrency assets, the bank still stood 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 cryptocurrency­transactions via their platforms or agent outlets,” Dr Addison stated.

On the growing cyber security threat in the country, the Governor said as online business transactions had grown, so had the incidence of cyber-attacks, and mobile mon­ey and Automated Teller Machine fraud.

He said 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 Addison stated.

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.