Namibia’s government has officially signed a law to regulate Virtual Asset Service Providers (VASPs) operating in the country, thereby reversing its initial 2017 decision to ban cryptocurrency exchanges.
On July 21, the law regulating VASPs was published in the Gazette of the Republic of Namibia, following its approval in the country’s National Assembly on July 6 and President Hage Geingob’s signature on July 14.
The legislation, known as the Namibia Virtual Assets Act 2023, aims to establish a regulatory authority to oversee crypto exchanges in the country. This represents the first law outlining how Namibia should regulate activities related to cryptocurrency. The Act will come into effect on a date set by the Ministry of Finance.
The key objectives of the law are to protect consumers, prevent market abuse, and mitigate risks associated with money laundering and terrorist financing. Non-compliant providers could face penalties of up to 10 million Namibian dollars ($671,000) and a maximum of 10 years in prison. However, the Bank of Namibia, the country’s central bank, still asserts that cryptocurrencies will not be recognized as legal tender within the country.
The legal U-turn in Namibia began in May 2018 when the Bank of Namibia retracted its original decision to ban cryptocurrency exchanges.
This follows South Africa’s recent announcement that all cryptocurrency exchanges in the country must obtain licenses by the end of 2023 to continue operations. Other African nations that have passed cryptocurrency laws include Botswana, Kenya, Mauritius, and Seychelles. The Central African Republic declared Bitcoin legal tender in April 2022, but this legislation was repealed less than a year later.
According to the International Monetary Fund, African countries including Cameroon, Ethiopia, Lesotho, Liberia, and the Republic of the Congo, Sierra Leone, Tanzania, and Zimbabwe have enforced a ban on cryptocurrencies.
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