Digital currencies not licensed in Ghana- BoG warns

The Bank of Ghana has cautioned the public against transacting business with digital currencies such as Bitcoin, in Ghana.

According to the Central Bank, it has not licensed the activities in digital currency under the Payments System Act 2003.

“The Bank of Ghana wishes to notify the general public that these activities in digital currency are currently not licensed under the Payments System Act 2003 (Act 662),” a statement on the development said.

It further indicated that, the central bank is deepening its laws on electronic and financial transactions in line with international standards and the evolving electronic payments landscape.

“The Bank of Ghana is currently investing a lot of resources to further enhance the payments and settlements system, including digital forms of money and also to introduce cyber security guidelines to safeguard electronic and online financial transactions.”

Responding to this issue at the Monetary Policy Committee meeting on Monday, January 22, 2018, the Governor of the Bank of Ghana, Dr. Ernest Addison also stressed some progress made by his outfit regarding regulating digital currencies.

“The Bitcoin is a digital community currency that is being used to undertake global payments it is not a legal tender in this country hence people have to be conscious on their approach to that,” he stated.

Dr. Addison added, “We are looking at the new payments systems bill that will deal with the issue of digital and electronic money and that new bill will be passed by Parliament in the next few months. And then we hope that after the bill comes out, more modern forms of payments that are issued by banks and non banks that would be registered by the Bank of Ghana would be covered by the laws and the regulatory purview of the bank.”

Bitcoin, among other cryptocurrencies, have gained significant prominence across the world as a digital trading currency.

Litecoin, Ethereum, Zcash, and Ripple are among the many different cryptocurrencies.

While some countries and organizations are accepted Bitcoin as a legal tender, others have reacted negatively to its use.

The value of one bitcoin shot up by almost 1,300% from $999 in January 2017 $13,800 on December 31, 2017.

Some Ghanaians have launched campaigns to impress upon the government to open up to allow trading in digital currencies.

‘Invest 1% of dollar reserve into bitcoin’

Recently, the Vice President of Groupe Nduom, Papa-Wassa Chiefy Nduom, urged the Bank of Ghana [BoG], to consider investing foreign currency reserves into bitcoin.

Chiefy Nduom, a Bitcoin enthusiast with a background in banking technology, said that the bitcoin cryptocurrency could become digital gold for Ghana and other countries on the African continent.

“Just as investors will take gold and store it in their banks around the world to hedge against risks that they can’t perceive because they can’t predict the future, people are doing the same thing with bitcoin,” Mr. Nduom noted in a video message ushering in 2018…. In Ghana, in particular, I think the Central Bank should look very carefully into putting maybe up to 1 percent of our dollar reserves into bitcoin, studying the space and announcing to the world that we are going to be open for investment in bitcoin… we need to be heavily invested in these areas,” he said.

What is Bitcoin?

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.

It’s the first example of a growing category of money known as a cryptocurrency.