The popularity of cryptocurrency in Ghana has grown in recent years, as well as access to it has become easier. Could cryptocurrency be an option for citizens in Ghana to escape the economic crisis? Can Ghana become the next leader in cryptocurrencies? These are a few of the questions that this article will make you reflect about, especially if you’re think about doing business in Ghana.

The popularity of cryptocurrencies in Ghana

One of the main reasons for its popularity is the notion of you being able to be your “own bank” by eliminating third parties. This has been attractive to Ghanaians and seen as a possible “solution” to their financial stress caused by all the economic turmoil Ghana is currently going through. 

As more and more people are opting for crypto, its legal status has seen significant shifts globally, with some countries legalizing and other banning the use of Bitcoin and other cryptocurrencies. 

The Central African Republic was the first country in Africa to legalize cryptocurrency. Nigeria was the first country in Africa to have introduced and implemented its own CBDC (central bank digital currency), the eNaira. Since then, many other African countries have examined their economies and put in place measures and policies that support their economies, and Ghana is no exception.

Overview of the cryptocurrency market in Ghana

In order for a media exchange to be legalized for official use in Ghana, it has to be supported by the Bank of Ghana. Currently this has not been approved and the use of cryptocurrencies is banned. 

Reason to this being, as stated by The Governor of the Bank of Ghana, the country doesn’t have the necessary regulations to support the use of cryptocurrencies. However, they have drafted a Payment Systems and Services Bill (Ghanaian Bill) through which cryptocurrencies could be regulated through companies registered with the government as “Electronic Money Issuers”. 

Despite the ban, a 2022 report by Triple A shows that it is estimated that over 700,000 people, or 2.16% of Ghana’s total population, currently own cryptocurrency. Furthermore, Google Trends shows that Ghana is among the top 20 countries to run google searches about cryptocurrency.

According to the State of Crypto: Africa report, this makes it clear that consumers have an organic and growing interest in cryptocurrency and its applications. They also believe that disinflationary crypto assets that enjoy digital scarcity are one option for citizens to escape the economic crisis in Africa. 

The creation of cryptocurrency exchange markets such as Paxful in Ghana, who opened a Bitcoin Technology Center in Ghana, are helping spread and make Bitcoin education more accessible, apart from the fact of being able to generate more employment within this emerging sector. 

How could cryptocurrency serve as a solution to the current economic crisis

Reduce land ownership conflicts

One of the challenges that many Ghanaians face is with land ownership. More than 80% of landowners lack official title deeds with the Land Commission of Ghana and most land is held customarily through oral agreements, making it very difficult to track ownership of land. This creates land conflict, lawsuits and multiple ownership claims that can go on for a whole lifetime. 

To resolve this, Ghanaian start-up Bitland is using blockchain technology to mirror official title deeds, thereby boosting the integrity of the land records held with the Land Commission of Ghana. Bitland believes that after their land is clearly registered on the blockchain, landowners may finally be able to apply for loans and mortgages with their banks.

Similarly, Ghanaian start-up BenBen is transforming property ownership in Sub-Saharan Africa by placing property records onto the Blockchain. By securing land records on the Blockchain database, it allows citizens to prove land ownership and securely facilitate transactions such as home loans.

Aid in the facilitation of digital payments

Currently many people in Ghana rely on mobile money transfers. According to the Payment Systems Oversight Annual Report, there were more than 48 million active mobile money accounts as of December 2021. However, with the introduction of the electronic transaction Levi (e-Levy) many buyers at major market centers in Accra have abandoned the use of mobile money as a payment option and rather prefer the use of cash. 

Making use of cryptocurrency for remittance and cross-border payments can offer a cheaper and faster alternative to this mode of transfer or any other traditional mode of payment. 

The risks of using cryptocurrencies

The Bank of Ghana and the country’s most reliable banks, alongside other central banks across the world like Iran, China and the Reserve Bank of India, do not support the use of cryptocurrency due to the ‘risks’ involved in it. Risks mentioned include, cryptocurrency being an instrument for money laundering, fraud, the financing of terrorism, high incidence of cyber fraud and low level of financial/digital currency literacy. 

The e-cedi as an alternative solution to crypto

The e-cedi is part of the project “Digital Ghana Agenda” which aims to digitalise Ghana’s 30 million people, government and services. The e-cedi is a proposed central bank digital currency (CBDC) for Ghana which would complement the current Ghanaian cedi and serve as an alternative to physical cash, and the ‘Cashlite Agenda’.

In 2021, the Bank of Ghana already went on pilot stage through which they got to an advanced pre-design stage of a state-backed digital currency, claiming it will make Ghana one of the first African countries to develop a state-backed digital currency