Namibia, following the footsteps of other African nations, has taken a significant stride in embracing cryptocurrencies and digital assets. The country’s National Assembly has recently approved a bill that aims to regulate these innovative forms of currency as well as virtual asset service providers (VASPs).
The legislation, which passed the lower house of parliament on June 22, establishes a comprehensive framework for licensing and regulating VASPs. Moreover, it designates a regulatory authority responsible for overseeing these providers and their activities in order to ensure consumer protection, prevent market abuse, and mitigate the risks associated with money laundering, financing of terrorism, and proliferation activities in the digital asset markets. The bill also addresses incidental matters related to these objectives.
Iipumbu Shiimi, the Minister of Finance and Public Enterprises, highlighted the establishment of a regulatory body that will supervise and grant licenses to VASPs operating within the country. Noncompliant providers could face penalties of up to 10 million Namibian dollars ($671,572) and a maximum prison term of 10 years. However, it is important to note that the Bank of Namibia maintains its stance that cryptocurrencies do not hold legal tender status in the country.
Kazembire Zemburuka, the director of strategic communications and international relations at the Bank of Namibia, reiterated the bank’s position on virtual assets. He stated that the bank will assess and make a decision regarding their acceptance within the financial system once the associated risks, particularly those related to innovations like virtual assets, are better managed.
The Bank of Namibia had previously expressed its strong opposition to the use of cryptocurrencies as a method of payment for goods and services back in 2017. At that time, the bank emphasized that virtual currency exchanges were not in line with the country’s existing law, which dates back several decades.
With the approval of this bill, Namibia takes a significant step toward embracing the potential of cryptocurrencies and digital assets while simultaneously addressing concerns related to consumer protection, financial integrity, and national security. The forthcoming official publication of the bill will mark its entry into effect, setting the stage for a new era of regulated digital asset activity within the country.
