The Ghanaian cedi recently plunged to a record low, trading at GHS 14.9335 against the U.S. dollar, which led to its designation as the fourth-worst-performing currency globally. Additionally, a decline in cocoa production has further complicated matters for the cedi, a currency previously ranked as the world’s worst-performing during the last quarter of 2022. Cedi […]
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Ghana’s Vice President Says His Government Aims to Become the First to Be Powered by Blockchain
The Ghanaian government’s next phase in its digitalization drive is set to be the adoption of blockchain technology, according to the country’s vice president. He stated that his administration aims to become one of the few governments worldwide powered by blockchain, and the first in Africa. A Blockchain-Powered Government The Vice President of Ghana, Mahamadu […]
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Ghana’s Securities Regulator Creates Taskforce to Build Capacity for Crypto Asset Oversight
The Ghanaian securities regulator has established a task force which is expected to help it boost its capacity to regulate crypto assets. Ghanaian residents have continued to trade and invest in cryptocurrencies and this has forced the regulator to think of ways to protect crypto users.
Gaining Crypto Asset Owners’ Confidence
According to Daniel Ogbamey-Tetteh, the Director General of the Ghanaian Securities and Exchange Commission, the commission has established a task force to help it build its capacity to oversee and regulate crypto assets. The establishment of the task force is in line with the International Organization of Securities Commissions (IOSCO)’s call on members to take steps to protect digital asset consumers.
Ogbamey-Tetteh made these remarks at an event marking the commission’s 25th anniversary. As per a report by BFT Online, the Ghanaian regulator has also been working on boosting capital and crypto asset owners’ confidence in the commission.
Interestingly, the SEC through its deputy director general, has previously advised Ghanaian residents to stay away from crypto assets because they are not regulated by the commission. However, despite this admonishment, Ghanaian residents have continued to trade and invest in cryptocurrencies, forcing the regulator to think of ways to protect crypto users.
SEC Implementing a Digitalization Program
To achieve this, the Director General revealed that the SEC is prioritizing developing human capital and the digitalization program. He said:
We are investing in developing the human capital of SEC as well as implementing a digitalization program. We have started implementing a Risk-Based Supervision framework as we seek to migrate from the compliance-based supervision mode.
Ogbamey-Tetteh added that his organization’s pursuit of regulatory technology (regtech) and supervisory technology (suptech) solutions is an attempt to strike a balance between supporting financial innovation and maintaining market integrity and stability.
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Ghana’s Central Bank Names Eight Money Transfer Companies Operating Without Its Approval
The Bank of Ghana recently pointed the finger at eight money transfer organizations which are allegedly operating in Ghana’s remittances and forex market without its approval. The central bank also warned the public and regulated financial institutions against having dealings with the eight firms.
Eight Firms Did Not Adhere to the Requirements of the Foreign Exchange Act
The Ghanaian central bank has identified eight money transfer organizations (MTOs) that are operating in the country’s remittances and forex markets without its approval. In a notice issued on Nov. 16, the Bank of Ghana (BOG) also warned the public and regulated financial institutions against having dealings with said MTOs.
According to the notice, the eight MTOs are Lemfi, Wise, Transfer Go, Xoom-A Paypal Service, Sendvalu, Boss Revolution, BTC-AZA Finance, and Supersonicz. The notice said each of the above MTOs is violating Section 3.1 of the Foreign Exchange Act, 2006 (Act 723). This law states that no person should “engage in the business of dealing in foreign exchange without a licence issued under this Act.”
Furthermore, section 15.3 of the same law specifically states that any movement of foreign exchange to and from Ghana should be done by persons with the requisite licenses. The central bank also reminded approved MTOs that they should adhere to the requirements of their respective licenses at all times.
“Approved MTOs are hereby reminded to terminate their foreign exchange flows through their partner institutions only and to adhere strictly to all guidelines in respect of their operations,” the bank explained.
Ghana’s Foreign Exchange Woes
Ghana, like many of its fellow African countries, has grappled with a shortage of foreign exchange on the official market. The shortage has not only increased pressure on the local currency’s exchange rate versus the U.S. dollar but has also fueled inflation. As previously reported by Bitcoin.com News, the Ghanaian cedi was one of the world’s worst-performing currencies in 2022.
Ghanaian monetary authorities have since adopted several measures which are aimed at restricting the forex parallel market’s influence on the economy. Some of these include the suspension of licenses of financial institutions caught on the wrong side of the law.
In its latest such action against supposedly errant institutions, the BOG said on Nov. 20 it had imposed a fine and suspended the “forex licence of Zeepay Ghana Limited from 27th November 2023 to 8th December 2023.”
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From Venezuela’s 360% to Ghana’s 42%, 10 Countries Worldwide Feel the Sting of Inflation
Drawing upon the latest statistics, ten nations are grappling with inflation rates surpassing 40% as of October 2023, while four countries are enduring inflation rates in excess of 100%. A look into the data curated by the International Monetary Fund’s World Economic Outlook reveals that the Venezuelan bolivar is weathering significant inflation at a rate of 360%, closely followed by the Zimbabwean dollar at a rate of 314.5%.
10 Nations Grapple With Soaring Inflation, Surpassing 40% and Shaking Economies
Numerous fiat currencies have faced challenges throughout 2023, resulting in a depreciation when measured against others. In essence, this inflation translates to a diminished capacity to purchase goods and services with the same amount of money, directly linked to decreased purchasing power. Inflation significantly influences consumers, and it equally disrupts businesses, leading numerous companies to collapse. Moreover, hyperinflation is typically characterized by monthly inflation rates that soar above the 50% mark.
As of October 2023, data from the International Monetary Fund (IMF) highlights that Venezuela is experiencing the world’s highest inflation rate at 360%. Situated at the northern tip of South America, the country has long been at the top of global inflation charts, with the Venezuelan bolivar persistently struggling against diminishing purchasing power. Zimbabwe’s dollar is also grappling with triple-digit inflation, registering at 314.5%, as per the IMF’s data.
This landlocked nation in Southern Africa has been wrestling with escalating inflation for a considerable period. In Sudan, nestled in Northeast Africa, the Sudanese pound is enduring an inflation rate of approximately 256.2%. For an extended duration, the country’s currency has been on a downward spiral, marked by significant devaluations and fluctuations in recent times. Meanwhile, in the southern hemisphere of South America, Argentina is facing its own economic turmoil with an inflation rate soaring to 121.7%.
Argentina’s inflation saga is extensive, with a significant driver being the swift increase in money supply. Over the previous year, the Argentine peso has witnessed a substantial decline in purchasing power. On the other hand, Suriname, the smallest sovereign nation in South America, is experiencing an inflation rate of 53.3% as of October 2023. The inflationary pressures in Suriname stem from a myriad of factors, including rampant money creation, fiscal imbalances, and external disruptions. Notably, the Surinamese dollar (SRD) underwent a 228% devaluation from August 2020 to October 2021.
Meanwhile, Turkey, straddling the borders of Southeast Europe and West Asia, is contending with an inflation rate of 51.2%. This economic challenge is fueled by Turkish President Recep Tayyip Erdogan’s unconventional stance favoring low interest rates. Turkey’s economic narrative has been punctuated by numerous instances of rapid and prolonged inflationary periods. Venezuela, Zimbabwe, Sudan, Argentina, Suriname, and Turkey presently top the global charts with the six highest inflation rates.
Finding Refuge in Barter Systems and Digital Currencies
Completing the list of the top ten nations grappling with the highest inflation rates are Sri Lanka (48.19%), Iran (47%), Haiti (43.6%), and Sierra Leone (42.9%), with Ghana closely following in the 11th spot, experiencing an inflation rate of about 42.2% as of October 2023. Residents in each of these countries are adopting various strategies to mitigate the effects of inflation.
These include engaging in barter systems, trading goods and services directly rather than relying on their weakening national currencies, and increasingly turning to digital currencies like bitcoin (BTC) and stablecoins. Numerous reports underscore the prevalent use of cryptocurrency in the regions most affected by inflation. In Venezuela, USDT is a popular means of settlement.
“Venezuela has had one of the worst ever hyperinflation rates at over 1 million percent,” one citizen told Chainalysis in an October 2023 report. “Cryptocurrency, particularly stablecoins, has helped many Venezuelans overcome this.”
Both the general populace and financial institutions in Zimbabwe are increasingly exploring crypto assets. In Argentina, economic uncertainty has led residents to lean on crypto assets and stablecoins, while in Sudan, there has been a noticeable shift toward digital currencies. Additionally, besides the U.S. dollar, the Turkish lira is gaining traction as one of USDT’s leading trading pairs globally. These borderless financial assets offer individuals a viable alternative, empowering them to preserve their wealth against an inflating fiat currency.
What do you think about the ten countries with inflation above 40%? Share your thoughts and opinions about this subject in the comments section below.