Namibia has joined other African nations in embracing cryptocurrencies and digital assets by passing a bill in the National Assembly. The bill, approved by Namibia’s lower house of parliament on June 22, aims to regulate digital assets, cryptocurrencies, and virtual asset service providers (VASPs) within the country. The legislation establishes a framework for licensing and supervising VASPs, with the objectives of consumer protection, preventing market abuse, and mitigating the risks of money laundering, terrorism financing, and proliferation activities associated with digital asset markets.
The bill seeks to appoint a regulatory authority responsible for supervising and granting licenses to VASPs operating in Namibia. Its main purpose is to establish a regulatory framework that ensures compliance, accountability, and transparency in the digital asset sector. By licensing and regulating VASPs, the legislation aims to protect consumers and mitigate financial risks associated with digital assets.
The objectives of the bill encompass consumer protection, prevention of market abuse, and addressing money laundering, terrorism financing, and proliferation risks associated with digital asset markets. Noncompliant VASPs may face penalties of up to 10 million Namibian dollars ($671,572) and a 10-year prison term, demonstrating the seriousness with which Namibia views the need for compliance within the digital asset industry.
While the bill paves the way for the regulation of cryptocurrencies and digital assets, the Bank of Namibia maintains its stance that cryptocurrencies do not hold legal tender status in the country. Kazembire Zemburuka, the bank’s director of strategic communications and international relations, reiterated this position and stated that the bank will assess and make a decision regarding the acceptance of virtual assets within the financial system once the associated risks are effectively managed.
In 2017, the Bank of Namibia expressed strong opposition to the use of cryptocurrencies as a method of payment for goods and services. At the time, it emphasized that virtual currency exchanges were not recognized under existing Namibian law. The approval of the new bill signals a shift towards a more comprehensive regulatory approach to digital assets within the country.
Namibia has taken a significant step towards regulating cryptocurrencies and digital assets with the approval of a bill in the National Assembly. The legislation focuses on licensing and regulating virtual asset service providers, aiming to protect consumers and address financial risks associated with digital assets. While the Bank of Namibia maintains that cryptocurrencies do not hold legal tender status, the approval of this bill indicates a growing recognition of the need for regulation and oversight in the digital asset sector.