Ghana’s central bank has launched a regulatory and innovation sandbox, focusing 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.
The regulatory sandbox will prioritize firms with products and services running on blockchain.
In its press release, the central bank revealed that it would 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-sized enterprises (MSMEs).” The financial regulator believes that the sandbox will reduce time-to-market for Ghanaian digital financial services firms.
Ghana looks to embrace blockchain and other innovative technologies.
In order 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 that the bank stated include reducing the cost of innovation, providing insight to regulators that will shape effective regulations, and incentivizing incumbent businesses to experiment with new ideas. While Ghana is embracing blockchain and other innovative technologies, its neighbor Nigeria has banned all banks from providing services to crypto-related companies.