Dr. Richmond Atuahene
Banking Consultant, Dr. Richmond Atuahene has advised the Bank of Ghana to improve the country’s banking regulatory architecture before venturing into the regulation of high-risk assets such as digital currencies.
Dr. Atuahen is of the view that due to recent shocks and financial disruptions such as the Domestic Debt Exchange Programme, the country will need a robust financial framework which will withstand future disruptions.
Speaking at the Money Summit programme, the banking consultant cautioned Bank of Ghana not to take hasty decisions in the regulation of new assets such as cryptocurrencies.
“We must improve our regulatory architecture if we want to go into cryptocurrency. Don’t just go there because Nigerians are doing it. So, you’d also want to do it”, he quizzed.
“We need to tread cautiously, even the assets we have, have we regulated to the best of our ability? It’s good to diversify. It’s good to go into higher-risk areas, but you must always be mindful that regulation is key and important for the investment space,” he emphasised.
His call comes at a time when confidence in the investment market is gradually picking up after a number of individuals and companies lost their investments, following a restructuring of the government’s debt obligations, deferring payment of matured instruments to a later date.
Many market watchers have called for diversification of investment vehicles, with some even citing cryptocurrency as an example.
Although Dr. Atuahene believes diversification of risk is a necessity, he is of the view that care must be taken in this regard.
“It’s good to diversify. It’s good to go into higher-risk areas, but you must always be mindful that regulation is key and important for the investment space. We need to tread cautiously,”
Dr. Atuahene’s warning highlights the importance of having a well-thought-out regulatory framework in place before diving into the cryptocurrency space. This includes ensuring that existing assets are properly regulated and that the necessary skills and expertise are in place to navigate this complex and rapidly evolving field.
“Have you done the right investment in skills? Upgrading and upskilling, have you done that?” the expert queried. “Or will you apply the old methodology for the new methodology?”
Meanwhile, some financial analysts including Joe Jackson, CEO of Dalex, have backed the call for the intended regulation.
He believes Ghana risks losing out if the country sits on the fence. Mr. Jackson and many technology enthusiasts say it’s long overdue.
“Dr. Atuahene is someone I respect very much, and I agree with on several points, but on this, I disagree with him. It’s better for us to grow in understanding and be able to utilise this as one of our alternative means, rather than to say we are not ready yet, I think we are ready, we are more than ready”, the CEO of Dalex Finance opined.
As the world becomes increasingly digitized, many investors are eyeing the lucrative opportunities presented by cryptocurrencies. While some financial and tech experts have called for the quickening of its regulation, others believe a lot more time will be needed to fully appreciate the digital currency space, especially crypto’s to avert financial crises.
Cryptocurrency is a digital or virtual currency secured by cryptography, functioning as a medium of exchange and a store of value. It operates on a distributed ledger technology, typically blockchain, ensuring secure and transparent transactions but without a central authority like the central banks does for regular currencies. Essentially, it’s a digital alternative to traditional currencies like the US dollar or euro and in the case Ghana, the cedi.
As the cryptocurrency market continues to grow and evolve, it’s clear that regulatory frameworks will play a critical role in shaping its future. Investors and industry leaders would do well to heed the expert’s warning and prioritize robust regulation and careful planning.
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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
