Namibia Takes a Step Forward: Crypto Exchange Regulation Bill Signed into Law

In a significant shift from its initial stance, the Namibian government has officially signed a law to regulate Virtual Asset Service Providers (VASPs) operating within the country. The move comes as a reversal of the government’s decision in 2017 to ban cryptocurrency exchanges.

On July 21, the VASP-regulating law was published in the Gazette of the Republic of Namibia, following its approval in the National Assembly on July 6 and subsequent signing by President Hage Geingob on July 14.

The legislation, known as the Namibia Virtual Assets Act 2023, has a crucial aim of establishing a regulatory framework to oversee crypto exchanges in the country. This law represents Namibia’s first formal steps toward regulating cryptocurrency-related activities.

The law is set to take effect on a date to be determined by Namibia’s Ministry of Finance. Among its primary objectives are safeguarding consumer protection, preventing market abuse, and mitigating the risks associated with money laundering and the financing of terrorism.

Failure to comply with the regulatory requirements could result in severe penalties, with non-compliant providers potentially facing fines of up to 10 million Namibian dollars ($671,000) and up to 10 years in prison. Despite these regulatory efforts, the Bank of Namibia maintains its stance that cryptocurrencies will not be recognized as legal tender in the country.

The trajectory of Namibia’s crypto regulation journey underwent a pivotal shift in May 2018 when the Bank of Namibia revised its initial decision to ban cryptocurrency exchanges, paving the way for a more receptive approach to crypto regulation.

Notably, other African nations have also taken various stances on cryptocurrency regulation. South Africa’s financial regulator recently announced that all cryptocurrency exchanges in the country would be required to obtain licenses by the end of 2023 to continue their operations.

Some African countries, such as Botswana, Kenya, Mauritius, and Seychelles, have passed cryptocurrency laws to regulate and govern crypto-related activities. In contrast, the Central African Republic legalized Bitcoin as tender in April 2022, but this legislation was later repealed less than a year after its enactment.

Conversely, several African countries, including Cameroon, Ethiopia, Lesotho, Liberia, the Republic of the Congo, Sierra Leone, Tanzania, and Zimbabwe, have chosen to enforce a ban on cryptocurrencies, as reported by the International Monetary Fund.

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