Namibian National Assembly Passes Bill to Regulate Digital Assets and Cryptocurrencies

The Namibian National Assembly has recently approved a bill aimed at regulating digital assets, cryptocurrencies, and digital asset service providers in the country. The bill, which is currently awaiting official publishing before it can be implemented, is expected to play a crucial role in protecting the interests of Namibians and combating the abuse of virtual assets, including the prevention of money laundering.

Iipumbu Shiimi, Namibia’s Minister of Finance and Public Enterprises, emphasized the significance of the new law in safeguarding the interests of Namibians. The establishment of this legislation marks a crucial step forward in effectively managing and regulating digital assets within the country. By doing so, the government aims to ensure the responsible and secure use of virtual currencies.

Under the new law, a governing body will be created to oversee and license the activities of virtual asset service providers in Namibia. These providers will be subject to strict regulations, and any defaulting entity may face severe penalties, including fines of up to N$10 million, a prison sentence of up to 10 years, or both. The introduction of such measures is intended to deter potential abuses and enhance the accountability of digital asset service providers.

However, it is important to note that despite these regulatory developments, 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, acknowledged the potential benefits of virtual assets in terms of financial inclusion and cross-border payments. However, he emphasized that individuals who own and transact with cryptocurrencies do so at their own risk.

Zemburuka further emphasized that until digital assets are better managed and regulated, the Bank of Namibia will not accept them as legal tender within the country. This position aligns with the bank’s earlier announcement in 2018, in which it expressed strong opposition to the use of cryptocurrencies as a method of payment for goods and services.

Despite this stance, the Bank of Namibia made a notable update last year, stating that bitcoin could be accepted and used as a form of payment at the discretion of individual merchants. This acknowledgment demonstrated a nuanced approach by the bank, recognizing the growing influence of cryptocurrencies while maintaining caution regarding their adoption.

In line with these developments, Namibia witnessed the establishment of its first bitcoin ATM in the previous year. Operating through crypto kiosks that are fully compliant with Namibian regulations and laws, this milestone indicated a growing acceptance and integration of digital assets in the country’s financial landscape.

As Namibia takes significant steps toward regulating digital assets, cryptocurrencies, and their service providers, the nation aims to strike a balance between promoting financial innovation and safeguarding the interests of its citizens. The upcoming publication of the bill will provide further clarity on the specific regulations and guidelines that will govern the use of digital assets in Namibia, marking a crucial milestone in the country’s evolving relationship with cryptocurrencies.

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