In a remarkable move, the Namibian government has officiated a law to regulate virtual asset service providers (VASPs) residing in the nation. Reportedly, the current step takes a U-step on the original decision from 6 years ago where the nation had decided to ban crypto exchanges.
Recently, the Namibian government officially signed the proposal and inserted it into the Gazette of the Republic of Namibia. The law has become a part of the Gazette after being approved in the Namibia’s National Assembly on July 6th followed by the signature of President Hage Geingob on July 14.
Reportedly, the bill called the Namibia Virtual Assets Act 2023 which has now turned into law aims to assign a regulatory authority to supervise crypto exchanges in the country. The law is the first of its kind laying out how the country should regulate cryptocurrency-related activities.
While the law has been officially passed and is something the crypto industry was looking forward to, there’s no clarity on when the laws will come into force. Sources suggest that the law will come into force at a date determined by Namibia’s Ministry of Finance.
Among the top aims of the regulation, the measures to ensure consumer protection, prevent market abuse and mitigate the risks of money laundering and the financing of terrorism. These measures highlight Namibia’s commitment to regulate the industry keeping the global standards in mind.
According to the passed rules, non-compliant providers could reportedly face penalties of up to $671,000 (10 million Namibian dollars) and 10 years in prison. However, amid the changing national stance something that has stayed firm is the stance of Namibian central bank.
The Bank of Namibia continues to maintain its position that cryptocurrencies will not hold legal tender status in the country. Nonetheless, the Namibia’s legal U-turn started in May 2018 when the Bank of Namibia revisited its original decision to ban cryptocurrency exchanges.
While African nations are eagerly looking forward to crypto assets forced by the growing inflation and currency devaluation. Simultaneously, the nations are also working on regulating the sector putting necessary guidelines into place.
Recently, South Africa’s financial regulator announced that all cryptocurrency exchanges in the country will be required to obtain licenses by the end of 2023 in order to continue operations. Other African nations have also passed cryptocurrency laws include Botswana, Kenya, Mauritius and Seychelles.
The Central African Republic made Bitcoin legal tender in April 2022, however, that legislation was repealed less than 12 months later. According to the International Monetary Fund, Cameroon, Ethiopia, Lesotho, Liberia, Republic of the Congo, Sierra Leone, Tanzania and Zimbabwe are among the African countries to have enforced a ban on cryptocurrencies.
However, considering the previous stance and comparing it to recent actions from Namibian government, it is a positive step towards the industry. It also marks growing realisation of the authorities that simply shutting eyes on increasing adoption and enforcing a ban won’t be the optimum way out.