MPs move to regulate cryptocurrency …say it is a risk to the banking sector

Members of Parliament are calling for legislation to regulate cryptocurrency transactions in the country.

According to them, millions of people across the globe are losing billions of dollars through cryptocurrency transactions – and this needs attention from the executive.

Presenting a statement on the floor of Parliament, Ama Pomaa Boateng – the Member of Parliament for Juaben, said government must critically look at the emerging trend to protect Ghanaian investors.

“The Internet utilisation and easy transaction capability in this potentially un-trackable facility in an international marketplace is currently a big risk to our banking sector.

“The utilisation of virtual currencies removes government’s hold on the economy. It renders the banks’ existence meaningless as people and institutions embrace this new exclusive trend of virtual currency. This results in low tax revenues for government, as well as all kinds of transactions going on at the blind side of government which may have negative effects on our economy,” she said.

According to her, reports indicate that the Economic and Organised Crime Office (EOCO) have apprehended two directors of Global Coin Community Help – a cryptocurrency syndicate that has swindled 109,29 Ghanaians to the tune of GH₵135m.

She also indicated that cryptocurrency can offer several benefits to the economy if it is properly managed, and with the right laws to back it.

It has the potential to change the way the country banks, make transactions and views money; some governments are using the technology’s potential for the delivery of public services, especially in the UK, Venezuela and other countries, she noted.

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Contributing to the statement, Deputy Minority Leader, James Klutse Avedzi, said government must resource the Bank of Ghana to conduct research and training to regulate the transactions.

“It is something that is coming as a new phenomenon, not only in the form of investment platforms but also as a medium of exchange that people use for financial transactions.

“I do not think that BoG will have the expertise to regulate this new phenomenon now; what we should be asking the BoG to do is to invest in training – how we can train and get expertise on how cryptocurrency can be regulated,” he said.

He maintained that once there is regulation, people can be allowed to operate such business in the country.

Chairman of Parliament’s Finance Committee, Dr. Mark Assibey Yeboah, described the transaction in the country as illegal and urged Ghanaians to stay away from investing in cryptocurrency business, since the BoG is currently struggling to regulate such transactions.

Cryptocurrency is not subject to censorship or centralisation, or have fees or commissions to pay. Lesser negotiation prices and transaction costs attract many Ghanaians to sign up for cryptocurrency to invest, trade overseas or remit back home.

There is a growing number of services and merchants accepting cryptocurrency all over the world. In Ghana, there are online cryptocurrency exchange platforms and merchant solutions for mobile money and foreign exchange remittances.

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Cryptocurrency is a completely virtual currency that uses Blockchain technology and cryptography for security, which makes counterfeiting difficult. Cryptocurrency uses principles of computer science, cryptography and economics.

There is no physical currency the way there is a cedi or dollar; the blockchain technology allows multiple identical copies of a record to be stored in different computers on a network and is updated by multiple users – unlike the traditional banking system.

It is created in cyberspace, where ‘miners’ or users utilise the power of their computers to solve complex algorithms which serve as verification for transactions. Their reward is payment with cyber-currency, which is stored digitally and passed between buyers and sellers without the need for an intermediary like a central bank or financial institution.

The users do not need to use their real-world identities; instead, they are represented by addresses, strings of random letters and numbers – taking control out of the hands of third-parties and giving the users freedom to transact while protecting their privacy.

This infringes the central bank’s historically exclusive right to issue money and control the money supply.

In modern technology times, the instruments used as exchange avenues have experienced change and evolved in accordance to the markets aiming to make trade-needs as easy as possible through cryptocurrency and crypto-assets.

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