The Namibian Government has officially signed a law to regulate Virtual Asset Service Providers (VASPs) operating in the country. This decision marks a reversal of the government’s initial stance in 2017, when it banned cryptocurrency exchanges. The law, known as the Namibia Virtual Assets Act 2023, aims to assign a regulatory authority to supervise crypto exchanges and is the first of its kind in the country.
On July 21, the law was inserted into the Gazette of the Republic of Namibia, following its approval in Namibia’s National Assembly on July 6 and subsequent signing by President Hage Geingob on July 14. The law will come into force on a date determined by Namibia’s Ministry of Finance.
One of the primary objectives of the law is to ensure consumer protection, prevent market abuse, and mitigate the risks of money laundering and the financing of terrorism. Non-compliant VASPs could face penalties of up to $671,000 (10 million Namibian dollars) and a maximum of 10 years in prison. However, it should be noted that the Bank of Namibia still maintains its position that cryptocurrencies will not hold legal tender status in the country.
Namibia’s journey towards cryptocurrency regulation began in May 2018, when the Bank of Namibia revised its initial decision to ban cryptocurrency exchanges. This recent development aligns Namibia with other African nations that have passed cryptocurrency laws, including Botswana, Kenya, Mauritius, and Seychelles. It is worth mentioning that the Central African Republic made Bitcoin legal tender in April 2022 but later repealed the legislation less than a year later.
In South Africa, the financial regulator announced that all cryptocurrency exchanges in the country will be required to obtain licenses by the end of 2023 to continue their operations. Similarly, several African countries, such as Cameroon, Ethiopia, Lesotho, Liberia, the Republic of the Congo, Sierra Leone, Tanzania, and Zimbabwe, have enforced a ban on cryptocurrencies according to the International Monetary Fund.
The regulation of VASPs in Namibia is a significant step towards promoting the safe and responsible use of cryptocurrencies in the country. By establishing a regulatory framework, the government aims to protect consumers, combat illicit activities, and provide clarity for businesses operating in the crypto sector. As more African nations recognize the potential benefits of cryptocurrencies, we can expect to see further developments in the regulatory landscape across the continent.
Overall, the Namibian Government’s decision to regulate VASPs reflects a growing acceptance of cryptocurrencies in Africa and a recognition of the need for appropriate oversight. With the Namibia Virtual Assets Act 2023 now in place, Namibia joins the ranks of countries embracing the potential of digital assets while striving to strike a balance between innovation and regulation in the rapidly evolving crypto industry.