The Bank of Ghana has engaged players in the financial space to address possible threats to the sector in order to achieve a sound and safe financial system.
To this end, the Central Bank, says it is committed in ensuring that its financial inclusion agenda is achieved in no time.
Speaking at the maiden edition of the Regulatory Sandbox Engagement Forum, on behalf of the first Deputy Governor of the Bank of Ghana, Head of FinTech and Innovation Office, Kwame Oppong, underscored the importance of such engagements with financial sector players.
“Let me underscore the importance of responsible innovation in this endeavor. Globally, sustainability has taken centre stage in all spheres of human activity. The need to assess the possible negative impact of our innovations on the present and future societies has become more critical than ever”.
“Adoption of responsible innovation presents a unique national advantage with the potential to attract investments into our FinTech ecosystem for the creation of employment and wealth”.
Mr. Oppong also addressed issues of privacy and confidentiality within the fintech space.
“Let me address the fintechs regarding issues of privacy and confidentiality. Bank of Ghana as a regulator of financial service maintains the highest level of confidentiality and secrecy.”
“We would like to assure you that every staff is committed to an oath of secrecy and under no circumstance will third party information be disclosed. A breach of the secrecy requirement attracts serious sanctions including dismissal”, he stressed.
Director of Fintech and Innovation at Bank of Ghana Mr Kwame Oppong, has called on Fintech and Crypto Industry leaders to be resolute in building safe and resilient space to safeguard the interest of consumers.
He said the enormous opportunity for affordable digital delivery of financial services to enhance financial inclusion had emerged as a new business model product and mode of interaction, posing a significant challenge to governance regulation, consumer protection, and financial integrity.
“For this reason, the Bank of Ghana implemented reforms to enable innovation in the financial services industry without compromising financial stability of which the Payment and Services Act of 2019 is at the care.”
Mr Oppong made the call when he addressed about 400 Fintech and Crypto Industry leaders from across Africa at a two-day Africa Money and Decentralised Finance (DeFi) Summit – West Africa edition in Accra.
He noted that Act 987 and other related notices issued by the Bank of Ghana had non-traditional entities such as Fintech to be licensed to provide various digital financial services under a proportionate and risk-based licensing regime.
“The elevations of these team players are positively disrupting the financial services industry and generating competition while encouraging strategic partnerships among these banks and financial technology providers,” he stated.
Mr Oppong said immense benefits had been reaped from using the regulatory environment provided by the Bank of Ghana, resulting in phenomenal increases in financial inclusion from 58 per cent in 2017 to 68 per cent in 2021 and that this was noteworthy.
He said since the Fintech Innovation Office was established in 2020 at the Bank of Ghana, which was one of the few such outfits globally among central banks to regulate and supervise, a total of 47 payment service providers and mobile money operators, both Ghanaians and foreign, were approved across various licensing categories to provide payment services.
“The interest of the investors both local and international continue to increase on the account of the favourable regulatory regime and the abundance of opportunities. Similarly, the bank is noted for its open-door policy and constructive engagement with industry stakeholders, prospective service providers and innovators.”
The Director said a considerable resource have been invested in studying and monitoring development in virtual assets and similar products including decentralized finance applications, non-fund road tokens, among others.
“The Ghanaian ecosystem is still an upcoming frontier market and therefore it takes these studies and findings seriously. Our regulatory stance is in line with our mandate to ensure financial stability of which consumer protection and financial integrity are essential component,” he stated.
Mr Oppong said: “To this end, the Bank of Ghana would continue to monitor development and implement measures to forestall any risk in the ecosystem in collaboration with other regulators and stakeholders where necessary.
“Any regulation issued will be in line with our quest to promote safe, sustainable and inclusive innovation that kindle the confidence in the ecosystem, and I must emphasise that consumer trust is of utmost importance to any financial service industry and in this case a key ingredient to achiving our financial inclusion goals.”
Mr Andrew Fassnidge, Founder Africa Tech Summit Kigali and London, said the purpose of the summit was to discuss and connect people to do business and was attended by key stakeholders like startup ventures, banking regulators and investors.
The expectation was to see the growth of crypto across Africa and a new wave of DeFi to drive business and investment.
The Africa Money and Summit West Africa is a leading African fintech, decetralised finance, mobile money and crypto event brought by curators of Africa Tech Summit series and provides insight and networking within the Pan-African Fintech, DeFi and Crypto ecosystem.
The Bank of Ghana (BoG), which oversees the banking industry, has made it clearer than ever that it is open to discussions with cryptocurrency stakeholders about a comprehensive regulatory framework for the asset class, which could signal the start of a new era in the country’s journey toward digital finance.
Currently, cryptocurrencies are not legal tender as they are not regulated under any of the country’s laws; as such, they are not backed by any guarantees or safeguards and the central bank has had to issue cautionary directives to banks and other financial entities against dealings in cryptocurrency among other unregulated financial tools.
In a recent cautionary statement, the BoG said: “The Bank of Ghana advises the general public to exercise caution in respect of cryptocurrency transactions.
“The Bank further directs all licenced institutions – including banks, specialised deposit-taking institutions, dedicated electronic money issuers and payment service providers – to refrain from facilitating cryptocurrency transactions via their platforms or agent outlets”.
However, in a more conciliatory tone Mr. Oppong stated that the regulator is willing to find a middle ground with the crypto community as long as it does not mean sacrificing the consuming public’s welfare.
“As a regulator, we are open to dialogue with the cryptocurrency industry for mutual appreciation of our mutual perspectives toward a more altruistic model and regulatory outcomes in which consumer interest and protection are pre-eminent,” the watchdog’s representative remarked.
Since its inception, cryptocurrency has drawn the ire of regulators as it attempts to replace fiat currency without the accompanying regulation. Critics have said the checks and balances system of blockchain technology, on which it is based, is not sufficient to guard against fraud, money laundering and terrorism financing threats inherent in virtual currency operations.
These fears have been heightened following instances of high-value fraud and a nose-dive of the leading cryptocurrency – Bitcoin – from an all-time high of just under US$69,000 per Bitcoin in November 2021 to under US$20,000 in September 2022, with some analysts forecasting a dip to US$12,000 by the end of the year.
Nonetheless, regulators have begun to concede some ground; most notably by asking crypto exchanges to introduce know-your-customer (KYC) verifications.
Mr. Oppong noted that the BoG has been proactive in engaging developments driven by technology, saying it is the reason the Bank of Ghana has an open-door policy for engagement.
“We will continue being open to the understanding, interests, concerns and opportunities of all stakeholders to forge a collaborative solution that can help achieve our shared goals and expectations,” he said.
‘In our effort to promote fintech, though much progress has been made, there is so much more to be done,” he added.
He charged participants at the Summit to endeavour to contextualise innovation to address the peculiar challenges of the Ghanaian ecosystem, and by extension those of other emerging markets – with financial inclusion being a key element.
Founder of the Africa Tech Summit, Andrew Fassnidge, is optimistic that the meeting’s outcome will prove mutually beneficial in engagements with regulators.
