Namibia embraces crypto: New law signals regulation for virtual asset service providers
The Namibian government has passed a law to regulate Virtual Asset Service Providers (VASPs) operating in the country.
Highlights
- The Namibian government has passed the Namibia Virtual Assets Act 2023 to regulate the VDAs
- Its primary aim is to establish a regulatory authority responsible for overseeing and supervising crypto exchanges within the country
In a significant turn of events, the Namibian government has officially signed a law to regulate Virtual Asset Service Providers (VASPs) operating in the country. The newly approved legislation, titled the Namibia Virtual Assets Act 2023, marks a notable departure from the country's previous stance on cryptocurrency exchanges, as it had initially imposed a ban in 2017.
A landmark move to oversee crypto exchanges
The Namibia Virtual Assets Act 2023 is a pioneering piece of legislation, serving as the country's first comprehensive framework for regulating cryptocurrency-related activities. Having received approval in Namibia's National Assembly on July 6, the bill was officially inserted into the Gazette of the Republic of Namibia on 21 July after being signed by President Hage Geingob on 14 July.
The primary objective of the law is to establish a regulatory authority responsible for overseeing and supervising crypto exchanges within the country. By implementing this framework, Namibia aims to ensure
consumer protection, prevent market abuse, and tackle the risks of money laundering and terrorist financing associated with virtual assets.
Compliance and penalties
According to the Namibia Virtual Assets Act 2023, those providers who fail to comply with the regulatory requirements may face substantial penalties. Reports indicate that non-compliant VASPs could be subject to fines of up to 10 million Namibian dollars (nearly $671,000) and could even face up to 10 years in prison.
However, it is important to note that the Bank of Namibia remains firm in its stance that cryptocurrencies will not be recognised as legal tender within the country. Despite embracing cryptocurrency regulation, Namibia does not intend to grant legal tender status to digital currencies.
African crypto landscape
Namibia's recent move follows a trend of evolving cryptocurrency regulations across the African continent. While some nations have embraced the potential of cryptocurrencies and adopted regulatory frameworks, others have imposed bans on digital assets. South Africa, for example, has recently announced that all cryptocurrency exchanges operating within its borders must obtain licenses by the end of 2023 to continue their operations.
With Botswana, Kenya, Mauritius, and Seychelles already having passed cryptocurrency laws, the African crypto landscape continues to evolve. Notably, the Central African Republic briefly granted Bitcoin legal tender status in April 2022, but the legislation was later repealed within a year. Other African nations, such as Cameroon, Ethiopia, Lesotho, Liberia, Republic of the Congo, Sierra Leone, Tanzania, and Zimbabwe, have opted to enforce bans on cryptocurrencies, as reported by the International Monetary Fund.
As the crypto industry matures globally, African countries are navigating the complexities of digital assets, seeking to strike a balance between embracing innovation and protecting financial stability.
