Ghana’s central bank has launched a regulatory and innovation sandbox, with a focus on projects building on blockchain technology. The sandbox is in line with the bank’s pledge to drive financial inclusion through innovative digital financial services. It will be available to banks, payment service providers and deposit-taking institutions.
The Bank of Ghana launched the sandbox in collaboration with EMTECH Service LLC. The firm is in charge of the technology on which the sandbox will run.
In its press release, the bank revealed that it will prioritize firms with products and services running on blockchain technology. It will also support “remittance products, crowdfunding products and services, e-KYC (electronic know your customer) platforms, RegTech (regulatory technology), SupTech (supervisory technology), digital banking, products and services targeting women financial inclusion and innovative merchant payment solutions for micro, small and medium size enterprises (MSMEs).”
To qualify for the sandbox, firms must prove to be developing new digital business models which the current regulations don’t cover or innovative digital financial services that can address current persistent challenges, the bank stated.
The regulator believes that the sandbox will reduce time-to-market for Ghanaian digital financial services firms. It will also be beneficial to regulators as they’ll get to learn about innovations faster. Other benefits include reducing the cost of innovation, providing insight to regulators that will shape effective regulations and incentivizing incumbent businesses to experiment new ideas.
A representative for the Bank of Ghana further elaborated, “The sandbox will admit innovations that have not been covered by all the existing statutes with regards to regulation of the payment ecosystem in Ghana. Entities with such innovations can put in an application to the Bank of Ghana for evaluation and consideration.”
He also revealed that once an applicant is admitted into the sandbox, he will have 90 days to pilot his project.
The Bank of Ghana first announced that it would launch a sandbox eight months ago. At the time, the deputy governor claimed that one of its focuses once the sandbox launches would be a CBDC. He stated that the CBDC would complement the fast-rising mobile payments in the West African country.
While Ghana seeks to advance digital currencies, its neighbor Nigeria has launched a strict anti-Bitcoin stance. The Central Bank of Nigeria has recently banned banks from processing digital currency-related transactions. It also ordered them to identify accounts transacting digital currencies and shut them down. The CBN governor recently defended this stance, claiming it’s in the best interest of Nigerians.
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