Virtual assets remain without legal tender status, but businesses can still accept them as payment, according to the Namibian Central Bank
October 6, 2022 7:49 AM
The Bank of Namibia recently announced that it will be amending existing laws and regulations to include virtual assets and virtual asset service providers as part of its fintech innovations regulatory framework. There is a "battle between regulated and unregulated money on the one hand, and sovereign versus non-sovereign money on the other," as the governor of the central bank put it.
While cryptocurrencies are not recognized as legal tender in Namibia, the Bank of Namibia (BON) has announced that it will begin regulating "virtual assets (VA) and virtual assets service providers (VASP) under its Fintech Innovations Regulatory Framework in a phased approach, through its innovation hub."
The central bank also mentioned that it is contemplating modifying "the applicable laws and regulations diligently in consultation with other appropriate authorities."
Although privately issued digital currencies are not yet legally recognized, the BON has made it clear that businesses can accept them as payment so long as they are "willing to participate in such an exchange or trade."
The BON's apparent shift in tone toward digital currencies suggests the organization is beginning to see the light. However, in a previous statement by the central bank that it "does not recognize, support, or recommend the public possession, use, or trading of cryptocurrencies." The bank also forewarned Namibians that if they lost money, they would have nowhere to turn for help
Although the BON governor and cryptocurrency skeptic Johannes Gawaxab is included in the statement, he does agree that this is a pivotal time for the future of money. He stated:
"There will soon be a turning point in the history of currency. The conflict between sovereign and non-sovereign currencies and the regulation versus deregulation of money."
Gawaxab, however, has stated his opinion that CBDCs issued by central banks have advantages over privately issued or created digital currencies. But the BON governor stressed that his organization will not rush into rolling out a CBDC, despite also investigating and exploring the possibility.
CBDCs, according to Gawaxab, "hold immense potential benefit for a more stable, safer, more widely available, and less expensive means of payment than private forms of digital money if they are explored and applied with due caution and care.
The BON also shared that it would be releasing a CBDC consultation paper in the month of October.