Namibia has joined the ranks of African nations embracing cryptocurrencies and digital assets as it recently passed a bill in the National Assembly. The bill, which gained approval from Namibia’s lower house of parliament on June 22, is aimed at regulating digital assets, cryptocurrencies, and virtual asset service providers (VASPs) operating within the country.
The legislation’s primary goal is to establish a comprehensive framework for licensing and regulating VASPs, while also designating a regulatory authority responsible for overseeing the activities of these providers. By implementing this bill, Namibia aims to ensure consumer protection, prevent market abuse, and address the risks associated with money laundering, terrorist financing, and proliferation activities within the digital asset markets. Additionally, the law covers incidental matters related to these objectives.
Reports from local media suggest that the bill is currently awaiting official publication before it comes into effect. Iipumbu Shiimi, Namibia’s Minister of Finance and Public Enterprises, has reportedly highlighted the establishment of a regulatory body tasked with supervising and granting licenses to VASPs operating in the country.
Noncompliant service providers may face severe penalties, including fines of up to 10 million Namibian dollars ($671,572) and a prison term of up to 10 years. However, it’s worth noting that the Bank of Namibia maintains its stance that cryptocurrencies do not hold legal tender status in the country.
Namibia’s move to regulate cryptocurrencies and digital assets aligns with a broader trend across the African continent, where various countries have been exploring regulatory frameworks to govern these emerging financial technologies. As digital assets continue to gain traction globally, governments are recognizing the importance of establishing clear guidelines to foster responsible innovation while safeguarding their financial systems and protecting consumers.
Bank of Namibia Considers Acceptance of Virtual Assets Pending Risk Management
The Bank of Namibia has expressed its willingness to evaluate and potentially accept virtual assets within the country’s financial system, provided that the associated risks are effectively managed. Kazembire Zemburuka, the Director of Strategic Communications and International Relations at the Bank of Namibia, outlined the bank’s stance during a recent report.
This development marks a notable shift from the bank’s previous position in 2017 when it vehemently opposed the use of cryptocurrencies as a means of payment for goods and services. At that time, the bank firmly declared that virtual currency exchanges had no place within the nation due to existing regulations that date back several decades.
However, the bank’s latest statement suggests a more open-minded approach towards virtual assets, signaling a recognition of the evolving landscape of digital currencies and their potential impact on the financial industry. Zemburuka emphasized the need for comprehensive risk management strategies before making any decision regarding the acceptance of these innovative technologies.