Blockchain and cryptocurrency usage: Binance ready to help BoG craft regulations

BINANCE, the world's leading blockchain ecosystem and cryptocurrency exchange, has committed to assist Bank of Ghana (BoG) to design a comprehensive regulatory framework to guide the adoption and legal use of blockchain and cryptocurrencies in the country.

It said as a leader in that space globally, it would continue to offer intentional and international standard guidelines, and share global experiences to help BoG come up with a strong and workable regulation to protect individuals, businesses and the economy as a whole against any negative acts while leveraging the opportunities. 

Regional Head for both Central and Eastern Europe and Central Asia, Kyrylo Khomiakov, said this in an interview on the sidelines of the ongoing Binance Blockchain Week in Dubai, a major international conference on the theme: "Shaping the Future of Digital Finance”.

The conference, being attended by top leaders and innovators in the blockchain ecosystem and cryptocurrency exchange, aims to facilitate intensive networking, knowledge sharing and exploration of cutting-edge developments in the digital asset space.

It has created a major platform for industry leaders in blockchain and finance to share country and business insights on market trends, regulatory developments and technological innovations.

BoG draft guidelines

In its quest to remain a proactive regulator and following an extensive internal review of the surging popularity of digital assets such as cryptocurrencies such as Bitcoin and Tether (USDT) in Ghana, and engagements with various stakeholders, the bank, in August this year, issued draft guidelines on digital assets intended to, among other things, expose the bank’s proposed regulatory measures and solicit feedback from industry and the public.

This is in line with the bank’s commitment to continuously evolve a conducive regulatory environment that promotes financial inclusion and enhances financial stability.

Over the past three years, according to the bank, the use of various digital assets by Ghanaians has recorded a significant increase on account of factors such as high mobile money penetration, a tech-savvy youth demographic, high Internet usage and the rise of online companies offering crypto and virtual asset services, popularly known as Virtual Asset Service Providers (VASPs). 

While acknowledging the innovative and beneficial applications of digital assets in cross-border payments, charitable donations, crowdfunding, international remittances, as well as the economic opportunities presented by asset tokenisation, the bank says it remains vigilant in addressing potential drawbacks.

These include risks-related money laundering and terrorism financing (ML/TF), fraud, cyber-theft, capital flows and consumer protection concerns.

Best practice

Mr Khomiakov acknowledged the risks associated with the industry but said the move by the BoG was commendable and expressed the willingness of Binance as a global trusted player to help in whatever way.

Financial inclusion

He said the adoption of crypto through the right and trusted channels held the key to accelerating the pace of financial inclusion in Africa and Ghana for that matter.

Being the fastest growing continent in the world, crypto, he said, was very much relevant for the advancement of the continent and Ghana in particular.

Regarding safety and the risks associated with blockchain and crypto, Mr Khomiakov said unlike many others, the ecosystem was highly transparent “because with crypto, you can track every transaction to know how it is performing and to help the user make any decisions at any time”.

“What must be noted in this space is that, every transaction is tracked online. It’s cheaper and it’s fast and secure,” he added.

Caution 

On the downside, he admitted that “it is a growing industry and developing and more and more people are getting into it.”

He advised potential users not to “follow anyone anyhow. Just get the trusted sources and be sure before getting into it”.

Mr Khomiakov said there was the need for people to undertake intensive research and be sure of which to adopt because “there are so many coins among others being advertised all over and that is why people have to be very cautious to avoid being scammed”.

Protection 

At a time when Africa and the world are going through economic turmoil with high inflation and fluctuating currencies, he said investments into crypto was apt as it helped to protect against inflation and currency fluctuations.

Mr Khomiakov said it was the determination of Binance to continue to be compliant and use best global practices.

He said every country appreciates the need to regulate, adding that: “Some are early and some are preparing. But all governments understand this is the way forward because of the protection it provides for all.”

He said the challenge was that, regulation was very different but interesting to see how countries were regulating and competing.

Advice 

Mr Khomiakov advised people: “Educate yourself, read about it, know the historical background and how it works and decide whether you have the risk appetite.

Don’t just listen to anyone who just says there is a coin somewhere. Read and know their business model and be cautious. Do not go into crypto alone as a single investment basket because like stocks, it can have its down moments. Don’t be too excited either; just be cautious and track your progress.”