Namibia Approves Legislation to Regulate Crypto and Digital Assets

Namibia has taken a significant step in embracing cryptocurrencies and digital assets by approving a bill in its National Assembly. The bill, which successfully passed the lower house of parliament on June 22, aims to regulate digital assets, cryptocurrencies, and virtual asset service providers (VASPs) operating in the country.

The primary objective of the legislation is to establish a comprehensive framework for licensing and regulating VASPs, while also designating a regulatory authority responsible for overseeing and supervising these providers and their activities.

The bill focuses on key goals such as consumer protection, preventing market abuse, and mitigating the risks associated with money laundering, terrorism financing, and proliferation activities within digital asset markets. It also addresses other matters related to these objectives.

Reports suggest that the bill is currently awaiting official publication before it becomes effective. Namibia’s Minister of Finance and Public Enterprises, Iipumbu Shiimi, has mentioned the establishment of a regulatory body that will supervise and issue licenses to VASPs operating within the country.

Noncompliant providers could face penalties of up to 10 million Namibian dollars ($671,572) and a maximum prison term of 10 years. However, it is important to note that the Bank of Namibia maintains its stance that cryptocurrencies do not hold legal tender status in the country.

Kazembire Zemburuka, the director of strategic communications and international relations at the Bank of Namibia, reiterated the bank’s position, stating that they will assess and make a decision regarding the acceptance of virtual assets within the financial system once the associated risks are effectively managed.

Back in 2017, the Bank of Namibia had expressed strong opposition to the use of cryptocurrencies as a method of payment for goods and services, citing their lack of legal standing within the country’s existing legislation.

Namibia’s move to regulate crypto and digital assets reflects the growing trend among African nations to embrace the industry and establish regulatory frameworks to ensure consumer protection and address potential risks.

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