Namibia passes bill regulating cryptocurrencies and digital assets

By: Michael Wilson

July 6, 2023 3:36 PM

The Act attempts to create a framework for licensing and regulating suppliers of virtual asset services.

By passing a bill in the National Assembly, Namibia has joined other African countries in accepting cryptocurrencies and digital assets. The measure, which was enacted by Namibia's lower house of parliament on June 22, proposes to govern the country's digital assets, cryptocurrencies, and virtual asset service providers (VASPs).

The Act→ is designed to create a framework for licensing and regulating VASPs. It also intends to appoint a regulatory body in charge of overseeing these providers and their actions.

The primary goals are to safeguard consumers, prevent market misuse, and reduce the risks of money laundering, terrorism financing, and proliferation activities linked with digital asset exchanges. The law also addresses incidental issues linked to these goals.

Namibia's Virtual Assets Bill as seen on a computer screen. Source: Namibian Parliament

The bill is reportedly waiting for the official publication before it can take effect, as reported→ by the local press. Namibia's Minister of Finance and Public Enterprises, Iipumbu Shiimi, is said to have mentioned the establishment of a regulatory agency to regulate and give licenses to VASPs in the country.

A 10-year prison sentence and a fine of 10 million Namibian dollars ($671,572) are apparently in store for non-compliant service providers. The Bank of Namibia, on the other hand, contends that cryptocurrencies do not have legal tender status in the country.

Director for strategic communication and diplomatic relations at the Bank of Namibia, Kazembire Zemburuka, stated the bank's position in the report, saying that the bank will evaluate and make a decision on whether or not to accept innovations like virtual assets once the risks associated with them have been better managed.

The bank stated in 2017 that it was highly opposed to the usage of cryptocurrencies as a form of payment for goods and services. According to the African country's decades-old law, virtual currency transactions have no place in the country.