In a landmark move towards embracing digital finance, Namibia has followed the footsteps of other African nations by endorsing a bill in the National Assembly designed to regulate cryptocurrencies, digital assets and their corresponding service providers.
The legislation, which was given the nod in Namibia’s lower parliamentary house on June 22, strives to establish a supervisory framework for the licensing and regulation of virtual asset service providers. It also seeks to assign a regulatory authority tasked with monitoring the activities of these providers.
The key objectives of this legislative initiative include bolstering consumer protection, curbing market abuse, and mitigating risks associated with money laundering, terrorist financing, and proliferation activities in the digital asset markets. The law further addresses supplementary matters relating to these targets.
Pending official publication, the bill is set to take effect as per local media reports. Namibia’s Minister of Finance and Public Enterprises, Iipumbu Shiimi, has hinted at the formation of a regulatory body that will oversee and grant licences to virtual asset service providers in the country.
Penalties for non-compliance could reportedly escalate to a fine of up to $671,572 (10 million Namibian dollars), a decade-long prison sentence, or both. However, the Bank of Namibia retains its stance that cryptocurrencies do not possess legal tender status in the nation.
Kazembire Zemburuka, the Bank of Namibia’s director of strategic communications and international relations, reiterated the bank’s position, suggesting that acceptance of innovations such as virtual assets within the financial system will be considered once the associated risks are effectively managed.
In 2017, the Bank of Namibia explicitly expressed its opposition to the usage of cryptocurrencies as a payment method for goods and services. It asserted that virtual currency exchanges held no place in the African nation, as per its longstanding law, further emphasizing that cryptocurrencies lacked legal tender status in the country.
In the face of these challenges, the Namibian parliament’s approval of the bill has been seen as a progressive step. However, local experts like Jesaya Hano-Oshike caution against introducing unnecessary hurdles.
Arney Tjaronda, a financial analyst, welcomed the bill’s passage, but underlined that the authorities should not overlook the potential impact of digital assets on the country’s financial system.
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