The Securities and Exchange Commission (SEC) last week announced its readiness to regulate digital currencies known as cryptocurrency on the capital market but the move may have been met with great opposition as the Bank of Ghana BOG the institution cloth with powers to back currencies and issue same as legal tender has crushed SEC’s plans to regulate cryptocurrency in Ghana.
According to BOG, cryptocurrency does not have the backing of the central bank and cautioned the public against trading or using it in any form in Ghana stating that those engaged in the use of it in any form do so at their own risk, the governor told norvanreports during the 100th MPC press conference of the central bank.
The Commission’s decision to regulate the highly volatile digital currency was made known by the Deputy Director-General of SEC, Paul Ababio, during the launch of the Commission’s 10-year Masterplan project.
The 10-year Masterplan project launched by the Commission, aims at diversifying the capital market as well as boosting economic growth.
The plan is intended to help raise enough capital for key infrastructural projects in order to meet the country’s growth agenda. It is expected to serve as a blueprint for developing the market in Ghana over the next 10 years.
According to him, SEC as part of the implementation of its Master plan will also look at implementing an engagement series with sector players in the digital currency space to dialogue on how to regulate cryptocurrency use in the country.
“We will be establishing a “Fintech roundtable’ and invite selected participants. We will also have an engagement session around this and come out with a clear cut policy.”
“We will be able to spell out what the strategy will be, on how to address it. There are various dynamics to the crypto currency occurrence; there’s the actual block chain technology which can be deployed for other purposes and then the monetization of that technology and how it interacts with the real sector,” stated Mr Ababio.
“Obviously, as regulators we have concerns with money laundering, and all that will be dealt with,” he added.
But in what seems to be a disapproval of the use of cryptocurrencies in the country and consequently its regulation by any other statutory regulatory body in the country, particularly the SEC, Governor of the Bank of Ghana, Dr Ernest Addison, addressing the media at the 100th MPC press briefing cautioned Ghanaians against the use of cryptocurrencies in the country.
According to the Governor, aside not meeting the standard functions of money – which is, a medium of exchange and a unit of account – and its high volatility, cryptocurrency is not a regulated activity of the Central Bank.
“Cryptocurrency is not a regulated activity of the Central Bank, and so the public must not trade in it,” averred the Governor.
Meanwhile, the Central Bank has said plans to issue its own digital currency are far advanced.
Making the disclosure at the 100th Monetary Policy Committee (MPC) press briefing, Dr Addison noted the Bank has completed the first phase of the process which is the preferred design for the digital currency.
The second phase the Governor noted, constitute the implementation and piloting phase, which is currently being worked on by the Bank.
“We are quite advanced in the process to issue a digital currency, the first phase was the design of the electronic system and the second phase which is where we are currently, which is to see to the implementation and piloting phase of the digital currency,” he stated.
“After the pilot phase, we will then know if the digital currency is feasible and if not, what needs to be done to make it better,” he added.