Bank of Ghana Regulatory Sandbox Favours Crypto-asset Products
14th March, 2021.
Weeks have passed since the Central Bank of Nigeria(CBN) pronounced its crypto-asset transaction ban policy through a circular dated 5th February, 2021. As if taking a cue from its Nigeria central bank counterpart in the emergent cryptocurrency adoption and mainstreaming competition, the central bank of another Sub-Saharan West African country Ghana launched a regulatory and innovation sandbox pilot 25th February, 2021, which is favourable to crypto-asset and blockchain smart contract companies. The Bank of Ghana disclosed this in a press release.
Sandbox Targets and Rationales
The sandbox regulation introduced within a financial services sector controlled policy environment targets financial technology service provider companies (blockchain and crypto firms are caught) to have testing for their fintech products, services and business models which will be supervised by the Ghanaian central banking regulatory authority.
One of the rationales behind this, is that the Bank of Ghana has a commitment to the evolution and enablement of an inclusive regulatory environment, financial technology(fintech) promotion orientation and innovation support within its financial sector realm.
Source: Bank of Ghana
Furthermore, with the regulatory sandbox enabling environment created for the Ghana fintech ecosystem, the financial sector innovators have a veritable forum for interaction with the Ghana regulators, even as the main regulatory environment evolves. And most essentially, blockchain financial technology service providers i.e. crypto-asset exchanges, crypto-asset wallet service providers, white label solutions, Decentralised Finance(DeFi) projects, crypto lending and borrowing, saving and staking products based on the Distributed Ledger Technology(DLT) hitherto unregulated can have a shot at being effectively regulated, and thus attendant adoption opportunity, mainstreaming and eventual engendering financial inclusion.
Mainstreaming smart contract blockchain crypto-asset entities becomes increasingly the only option for the overused and grossly inefficient financial system legacy infrastructure, and Ghana’s swift regulatory reaction in this direction of liberal cryptocurrency regulation is an emulable lesson for other central banks across the world to learn from.
Boulevard A. Aladetoyinbo, Esq.
Head, Crypto-asset Capital Formation Practice.
Lex Futurus (Africa Region).
This newsletter has no legal advice piece intention. It serves informational and educational purposes only.
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