Namibia passes law to regulate cryptocurrencies despite central bank’s contrary stance

The Namibian National Assembly recently passed a bill to regulate digital assets, cryptocurrencies and digital asset service providers in the country. 

The details 

• According to reports, the bill now awaits official publishing before it can be implemented. 
• Iipumbu Shiimi, Namibia’s minister of finance and public enterprises, noted that the law was important to protect the interests of Namibians.  
• In addition, the law would also look to combat abuse of virtual assets and guard against money laundering. 
• Shiimi further added that a governing body would be established to oversee and license the activities of virtual assets service providers in the country. Defaulting providers could pay up to N$10 million in fines, a 10-year prison sentence or both. 
• However, despite these regulations, the Bank of Namibia maintains that cryptocurrencies have no legal tender status in the country. 
• Kazembire Zemburuka, the director of strategic communications and international relations at the Bank of Namibia, admitted that while virtual assets could improve financial inclusion and cross-border payments, individuals who own and transact with them do so at their own risks. 
• He added that until the assets are better managed and regulated, the bank will not accept them as legal tender in the country. 

Key quotes 

• On the new regulations, Shiimi said: 

“The aim of the legislation was to create a regulatory framework to protect consumers, and the risk of money laundering is mitigated.” 

• In reiterating the Bank of Namibia’s stance, Zemburuka told The Namibian: 

“When the associated risks that come with innovations such as virtual assets in the financial system are better managed, the bank will make the necessary assessments and pronounce itself on their acceptance.” 

Before now 

• In 2018, the Bank of Namibia announced that it was strongly against the use of cryptocurrencies as a method of payment for goods and services. It further affirmed that cryptocurrencies were without legal tender status in the country. 
• However, despite refusing to recognize cryptocurrencies, the bank announced last year that bitcoin could be accepted and used as forms of payment, stating that accepting payments in bitcoin was at the discretion of the merchant. 
• In that same year, the first bitcoin ATM in Namibia was established via crypto kiosks reported to be fully compliant with Namibian regulations and laws.