Namibia’s National Assembly Approves Legislation on Cryptocurrency Regulation

• The objective of the legislation is to establish a framework for licensing and regulating VASPs.
• The legislation is pending publication prior to its implementation.

The National Assembly of Namibia has enacted a law that provides regulation for cryptocurrencies and digital assets, making it the most recent African nation to do so. A framework to manage virtual assets, cryptocurrencies, and VASPs in Namibia was approved by the lower house of parliament on June 22.

The objective of the legislation is to establish a framework for licensing and regulating VASPs. It also seeks to create a regulatory authority to supervise the activities of such service providers.

The main aims are to protect consumers, prevent market manipulation, and mitigate the risks of illicit activities such as money laundering, terrorist financing, and proliferation within the digital asset sector. The law also addresses additional issues that arise from these primary objectives.

Strict Compliance

The law, as reported by local media, is pending publication before it can be enacted. Reports indicate that Iipumbu Shiimi, Namibia’s Minister of Finance and Public Enterprises, has suggested the establishment of a regulatory agency to oversee VASPs in the country and issue licenses to those that fulfill specific requirements.

According to media sources, service providers that do not adhere to the regulations may face penalties of up to 10 million Namibian dollars ($671,572) and a prison sentence of up to ten years. However, the Bank of Namibia maintains its position that virtual currencies are not recognized as legal tender in Namibia.

The bank clarified in 2017 that it does not endorse the use of cryptocurrency for transactions. It emphasized that the long-standing legislation of the African nation does not allow for the trading of virtual currencies.

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