Through The Looking Glass with Mandy Mawulikplim Ketorglo: From ambiguity to legal recognition: Understanding the Virtual Asset Service Providers (VASP) Act, 2025 (Act 1154)
The virtual asset ecosystem traces its origins to the creation of Bitcoin in 2009. After a hundred and fifty years of operation, the bank, Lehman Brothers went bankrupt on September 15, 2008.
This marked the start of a catastrophic chain reaction that ripped through global banking and real estate markets, what would become known as the 2008 Financial Crisis. Millions of people lost savings, homes, and jobs as banks failed and markets crashed worldwide, leading to a loss in trust of governments and central banks.
Amidst this crisis, a nine-page document was sent out on email channels by a mysterious figure known only by the name of Satoshi Nakamoto. His proposition was simple: a peer-to-peer digital currency that would operate without reliance on central banks or financial intermediaries.
Till date, Satoshi’s true identity remains unknown, adding some mystery to the origin of Bitcoin. Bitcoin was initially experimental, but has gradually gained global attention as its value appreciated and adoption expanded. Alternative cryptocurrencies have emerged, such as Ethereum offering different functionalities beyond peer-to-peer payments.
Over the past decade, digital assets have evolved into mainstream economic activity. Airlines such as South African Airways recently began accepting Bitcoin for flight bookings. According to the Memorandum of the Virtual Asset Service Providers (VASP) Act, 2025 (Act 1154) (VASP Act), Ghana’s virtual asset ecosystem has grown rapidly, ranking 29th globally with about three point one million users of cryptocurrency. However, this growth occurred largely in a space marked by regulatory uncertainty.
Young Ghanaians interact with virtual asset platforms daily, without any regulatory or institutional guidance. In the past years, there have been public cautionary notices from the Bank of Ghana signaling that cryptocurrencies were not legal tender and operated outside formal financial regulation. There was also no existing framework specifically for the regulation of virtual asset service providers in Ghana.
Existing legislation such as the Bank of Ghana Act, 2002(Act 612), the Securities Industry Act 2016 (Act 929) and the Anti- Money Laundering Act, 2020 (Act 1044), did not provide specific laws for the regulation of virtual asset service providers in Ghana. This made investors reluctant to invest in the virtual asset ecosystem. The passage of the VASP Act on 19th December, 2025 represents a decisive shift in policy. As the saying goes; “Innovation comes before regulation”.
Rather than distancing itself from the sector, the state has chosen to regulate, supervise and formalise the virtual asset ecosystem. The objective of the VASP Act is to regulate the provision of virtual asset services in or from the country. The VASP Act introduces a licensing and compliance regime for Virtual Asset Service Providers (VASPs), establishes regulatory oversight, and integrates virtual asset activities into Ghana’s broader financial regulatory system. In light of the above, it is critical that we analyze what ‘virtual assets’ are, and what the VASP Act means for VASPs and investors.
What Are Virtual Assets?
Global definitions of virtual assets generally align with the definition provided by the Financial Action Task Force (FATF). The FATF is an international organisation that sets global standards to prevent illegal money flows, including money laundering and terrorist financing.
The FATF defines virtual assets as digital representations of value that can be digitally traded or transferred and used for payment or investment purposes, but which do not include digital representations of fiat currencies, securities, or other financial assets that are already covered elsewhere under its standards.
The VASP Act defines a virtual asset as “a digital representation of value that can be digitally traded or transferred, and used for payment or investment purposes, but does not include a digital representation of a fiat currency, securities or a central bank.” The definitions exclude fiat currencies and central bank–issued money from the definition of virtual assets because those are legal tender as backed by the power of the state, while virtual assets relate to new, privately issued digital assets.
Virtual assets under the 2025 Act: Are they the same as cryptocurrency?
Virtual Assets are sometimes referred to as cryptocurrencies or digital assets. The VASP Act defines virtual assets in a manner that extends beyond traditional cryptocurrencies. While cryptocurrencies fall within its scope, the VASP Act captures a wider category of digital assets that are transferable and capable of being used for payment or investment.
This distinction is significant because, if regulation were limited strictly to ‘cryptocurrency’, new token structures could fall outside regulatory control. By adopting a broader formulation, the VASP Act seeks to future-proof the regulatory framework against technological evolution. Ghana’s approach aligns with the global trend toward functional regulation rather than technological categorization.
Who Is a virtual asset service provider?
The VASP Act defines a Virtual Asset Service Provider (VASP) to include a company or an external company registered under the Companies Act, 2019 (Act 992); a partnership established under the Incorporated Private Partnership Act, 1962 (Act 152); or a non-Ghanaian company, as defined under the Companies Act, 2019(Act 992) that provides a virtual asset service as a business or in the course of business in or from the country. From the VASP Act, an individual cannot be a VASP.
However, it is not mandatory to incorporate a company to be a VASP. Individuals who form and register partnerships under the Incorporated Private Partnership Act qualify to either register, obtain a virtual asset service licence or a sandbox licence. To qualify as a VASP, the entity must have registered or licensed under the VASP Act.
An entity will not be licensed as a VASP just because it calls itself a virtual asset service provider or a ‘crypto’ entity, but will be determined by the type of service the entity provides. This is essential so that companies cannot just call themselves crypto or VASP providers, which helps mitigate fraud and protect consumers.
Registration, licensing and regulatory oversight
The VASP Act establishes a mandatory registration, licensing or registration and licensing regime for VASPs. Depending on the type of service being provided, an entity may be required to either register; obtain a virtual asset licence; obtain a regulatory sandbox licence; or register and obtain a licence. Compliance is compulsory, not optional and operating without the necessary regulatory approval constitutes a breach.
The Bank of Ghana and the Securities and Exchange Commission are responsible for registering and licensing VASPs, supervising and enforcing the compliance of VASPs and ensuring that services are offered in a way that protects public interest and promotes growth of the financial services industry. The regulators serve as entry filters, ensuring that only financially and operationally sound entities operate in the market. The relevant authority to license a VASP will depend on the type of service the VASP provides.
The VASP Act separates registration from licensing. Depending on the service an entity provides or seeks to provide, the entity will have to apply for only registration, only a licence, only a sandbox licence or both registration and a licence .The VASP Act sets out the various types of services with the relevant regulatory authority and regulatory requirement in a schedule.
Registration of VASPs
An entity will qualify to be registered as a VASP if before the coming into force of the VASP Act that entity is engaged in the provision of a virtual asset service set out in the schedule for which a licence is not required or seeks to provide a virtual asset service specified in the schedule for which a licence is not required. A registration is valid for a period of 12 months and subject to renewal. An application for registration shall be made at least 3 months before expiry of the registration.
According to the schedule of the VASP Act, a non-custodial virtual asset wallet service provider requires registration from the Bank of Ghana. A VASP that issues and sells new virtual assets to the public needs registration from the Securities and Exchange Commission. A VASP that offers Virtual Asset Advocacy needs registration from both the Bank of Ghana and the Securities and Exchange Commission.
Virtual Asset Service Licence
An entity qualifies to obtain a virtual asset service licence if before the coming into force of the VASP Act, that entity is engaged in the provision of a virtual asset service which requires a licence or seeks to provide a virtual asset service which requires a licence.
The services that require licensing are set out in a schedule in the VASP Act. According to the schedule of the VASP Act, virtual asset services licensed by the Bank of Ghana include custodial virtual asset wallet services, virtual asset payment processors, asset tokenisation (stable coin issuance), virtual asset advocacy, and virtual asset borrowing and lending services.
Virtual asset services licensed by the Security and Exchange Commission include virtual asset exchanges and trading platforms, tokenisation (conversion of assets into digital tokens), ETFs, managers, investment advisors, advocacy and brokerage. Virtual asset dealing services require both registration and licensing from the Bank of Ghana.
When an application for a virtual asset service licence is made, the regulatory authority shall within 90 days after receipt of the application either approve the application and issue the licence, direct the applicant to apply for a sandbox licence or a licence under any other law if the virtual asset service is similar to a service which is governed by another law, or refuse the application. If the application is refused, notice of the refusal and the reason for the refusal must be given to the applicant. A virtual asset service licence is valid for 12 months and subject to renewal. An application for renewal must be made at least 3 months before the expiry of the licence.
Sandbox Licence
A person seeking to test a new virtual asset product, service, or technology may apply for a sandbox licence. The VASP Act defines a sandbox licence as “a temporary licence granted for a period of up to one year and subject to periodic review as the relevant regulatory authority may determine”. In operationalizing the VASP Act, the Securities and Exchange Commission has released the Securities Industry (Regulatory Sandbox Licensing) Guidelines 2026 which regulates sandbox licences.
These guidelines supersede and replace any previous guidelines on regulatory sandbox in the capital market including the Securities Industry (Regulatory Sandbox Licensing) Guidelines 2020. An applicant seeking a sandbox licence shall submit an application in the prescribed form, together with all required documents to the Securities and Exchange Commission for consideration.
The Bank of Ghana or Securities and Exchange Commission may direct a person who applies for registration; is a registered person; applies for a virtual asset service licence; or holds a virtual asset service licence to apply for a sandbox licence. This occurs where the virtual asset service represents or uses an innovative technology or method of delivery that requires supervision and oversight that is not offered by a licence or registration under the VASP Act or any other law.
A sandbox licence will also be required where it is in the best interest of the public, holders of a virtual asset service licence registered persons or the financial markets for the virtual asset service to be restricted temporarily or for specific requirements to be placed temporarily on that service.
Where the virtual asset service uses technology that may create systemic risk to the financial markets in the country or poses a money laundering or terrorism financing risk that is not properly mitigated under the Anti-Money Laundering Act,2020 (Act 1044) or the VASP Act.
Where a holder of a virtual asset licence or a registered entity is directed to apply for a sandbox licence, the virtual asset licence or registration shall be revoked. The Securities and Exchange Commission has issued a press statement that the sandbox period will last for 12 months.
After the first 6 months, VASPS whose services are market ready and have complied with all regulatory requirements may be transitioned to their respective activity based licence or registration. VASPs who are not market ready will be allowed to continue for the remaining 6 months. Applicants for a sandbox licence must be legally incorporated and possess the legal authority, operational capacity, and financial resources to safely conduct the proposed activity.
Applicants are required to submit a detailed testing plan outlining objectives, scope, limits, timelines, and measurable outcomes, and provide additional governance, custody, and monitoring arrangements. They must also demonstrate adequate governance structures, risk management systems, and a clear winding-up plan to protect customers and settle obligations if the test fails.
Additionally, applicants must maintain a physical presence in Ghana with accountable officers, while foreign providers must prove valid licensing and regulatory cooperation in their home jurisdiction. Virtual Asset Mining or Validating and Innovative Virtual Asset Services are regulated by both the Bank of Ghana and Securities and Exchange Commission.
Compliance obligations
The VASP Act imposes certain compliance obligations on VASPs, including, but not limited to Know-Your-Customer (KYC) procedures, customer due diligence, monitoring and reporting of suspicious transactions, record-keeping requirements and the appointment of compliance officers.
These obligations align with international Anti- Money Laundering standards by the Financial Action Task Force. Over the years crypto and virtual assets have been used for money laundering and other fraudulent activities. Therefore the compliance obligations on VASPs enhances transparency and reduces the risk of fraud, money laundering scandals, and abrupt regulatory crackdowns that could destabilize the market.
Regulation of Virtual Assets in Africa
Several African countries have moved from informal regulation of digital assets to clear regulatory frameworks for virtual assets and VASPs. In East Africa, Kenya has passed a VASP law establishing a legal regime, while Rwanda, Uganda, and Tanzania rely mainly on broader AML rules without dedicated VASP legislation.
In Southern Africa and the islands, Botswana, Mauritius, Namibia, Seychelles, and South Africa have dedicated laws requiring service providers to be licensed. In West Africa, Nigeria regulates crypto and related service providers under its Investment and Securities Act, while countries like Senegal and Côte d’Ivoire remain in the grey area. Ghana, by enacting the VASP Act has positioned itself among regional leaders of virtual assets.
Implications for VASPs
While the VASP Act enhances legitimacy, it also increases compliance costs. VASPs must invest in legal advisory services, compliance systems, cybersecurity infrastructure, and reporting mechanisms. Smaller operators may struggle to meet the high costs involved.
However, regulatory clarity may attract investors previously hesitant to enter an unregulated market. Formalisation can facilitate partnerships with banks and foreign investors. Thus, while the compliance burden is real, it may ultimately strengthen the ecosystem. VASPs who see compliance as a way to grow the virtual asset ecosystem rather than a whip will be the winners in the long run.
With China’s prohibition on virtual assets since 2021 and its reiteration of the ban in recent times, VASPs in Ghana must act timely by registering and licensing and build strong compliance infrastructure. Remittances and stablecoins are one of the fast developing aspects of virtual assets. If VASPs in Ghana operate in these areas and partner with banks and other investors, they stand to make a lot of profit, turning Ghana into one of the leaders of virtual assets globally.
Although Nigeria ranks higher than Ghana in terms of cryptocurrency adoption with sources ranking Nigeria around 2nd to 6th globally, the virtual asset market is now open to all. The enactment of the VASP Act is a step in the right direction and if VASPs take advantage of this, Ghana has the potential of becoming leaders of virtual assets in Africa.
What the VASP Act means for investors
The enactment brings many benefits for both retail and institutional investors. Retail investors stand to benefit from transparency and reduced exposure to fraudulent schemes. Institutional investors often prioritise regulatory certainty, which the VASP Act provides. There is now legal status for virtual asset activities and increased market legitimacy.
However, regulation does not eliminate other risks such as market volatility, technological vulnerabilities, cybersecurity threats and cross-border enforcement limitations. Nevertheless, it reduces regulatory uncertainty. Investors can take advantage of this regulatory certainty to partner with VASPs in various forms of virtual assets.
What the VASP Act means for banks and financial institutions
For banks in Ghana, the VASP Act is a big change. Banks can now offer new digital asset services, if approved by regulators. This could include safely holding crypto for customers, helping customers move money between bank accounts and digital assets creating digital versions of deposits, and offering regulated digital asset products.
On the other hand, Banks may lose customers to VASPs because the allure of these alternative finance schemes such as crypto are usually at higher rates of return as opposed to conventional bank investments.
Many people are already using informal or foreign platforms to move money or trade digital assets. If banks do not provide safe and legal options, customers may shift to digital assets. Banks which choose to engage in the virtual asset ecosystem must tread cautiously with heightened risk assessments given the technological fluidity of the ecosystem. Management of banks will need stronger systems for security, compliance, transaction monitoring, managing third-party partners, and fraud or cyber-attack prevention.
Conclusion
The VASP Act marks a pivotal moment in Ghana’s financial regulatory system. By formalising the virtual asset sector, clearly defining virtual assets and regulated activities, establishing licensing standards, and imposing compliance obligations, the VASP Act seeks to balance innovation with protection.
While challenges remain, the shift from regulatory ambiguity to legal protection is likely to enhance investor confidence. In a market driven as much by perception as by technology, regulatory oversight may prove to be the most valuable asset.
However, the ultimate success of the VASP Act will depend on implementation. Excessive regulation could stifle innovation and demotivate operators. On the other hand weak enforcement could undermine credibility. If well implemented, the VASP Act has the potential to transform Ghana’s digital asset sector into a leading market in Africa and globally.
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