Namibia Reverses Course: New Law Paves the Way for Regulated Cryptocurrency Operations
Namibia enacts law to regulate virtual asset services, reversing a 2017 ban and adopting measures to protect consumers and prevent market abuse.
Thu, 27 Jul 2023, 06:40 am UTC
Last week, Namibia made a significant turnaround from its 2017 cryptocurrency exchange ban as the government validated a new law to oversee Virtual Asset Service Providers (VASPs) within the country.
Namibia's President Hage Geingob signed the Namibia Virtual Assets Act 2023 on July 14, following its approval by the National Assembly on July 6. The law, marking the nation's first step in cryptocurrency regulation, was officially published in the Republic of Namibia's Gazette on July 21.
Enforcement of the new law will be determined by the Ministry of Finance and aims to protect consumers, prevent market exploitation, and mitigate risks related to money laundering and terrorist financing.
The consequences for non-compliance are severe, with potential fines of approximately $671,000 and up to 10 years in prison for providers who fail to adhere to the regulations. However, it's important to note that despite the new law, cryptocurrencies will not be granted legal tender status in Namibia, according to the stance maintained by the country's central bank, the Bank of Namibia.
This significant legal shift began in May 2018 when the Bank of Namibia reconsidered and revised its initial decision to ban cryptocurrency exchanges. Meanwhile, neighboring South Africa has mandated that all cryptocurrency exchanges secure licenses by the end of 2023 to continue their operations.
Several other African countries, including Botswana, Kenya, Mauritius, and Seychelles, have also enacted cryptocurrency regulations. In a brief and unique move, the Central African Republic declared Bitcoin as legal tender in April 2022, but later repealed this legislation within a year.
On the other hand, countries such as Ethiopia, Cameroon, Liberia, Zimbabwe, Sierra Leone, Lesotho, Liberia, Tanzania, and the Republic of the Congo have opted to ban cryptocurrencies following advice from the International Monetary Fund.
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