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The Republic of Namibia pivots on its crypto stance by introducing a law regulating the digital asset industry, ending the country’s total ban on cryptocurrencies.
Last week, the Namibian government signed its virtual assets bill into law after outlawing cryptocurrencies almost six years ago.
Namibia Choses Regulation Over Ban
Namibia officially signed into law its Virtual Asset Service Providers Act 2023 last week. The Government Gazette published the law on July 21 after it received approval from its National Assembly on July 6 and was signed by President Hage Geingob on July 14.
The law will come into force on a date yet determined by the country’s Ministry of Finance.
Namibia’s first law overseeing crypto-asset-related activities assigns regulatory authority over crypto exchanges. The bill mainly aims to ensure consumers are protected, market abuse is prevented, and the risks of money laundering and terrorism financing are mitigated.
The south African country maintained a ban on cryptocurrencies previously.
The Bank of Namibia (BON), the country’s central bank, upholds its position that cryptocurrencies will not become legal tender.
Crypto exchanges and providers that do not comply with the regulations set out in the law could face penalties of up to 10 million Namibian dollars, equal to about $671,000, and 10 years in prison.
Namibia Softens Its Approach to Bitcoin
The country announced in October 2022 that while Bitcoin and other crypto are not recognised as legal tender, its central bank announced it included “virtual assets (VA) and virtual assets service providers (VASP) under its Fintech Innovations Regulatory Framework in a phased approach, through its innovation hub.”
The BON’s announcement clarified that retailers and traders may accept money in the form of Bitcoin if they are willing to engage with cryptocurrencies and accept the risks inherent to digital assets. At the time of its announcement, the BON said it was considering revising appropriate laws and regulations pertaining to the industry.
Johannes Gawaxab, the Governor of the BON, further stated the bank was examining the viability of issuing a central bank digital currency (CBDC). Gawaxab, a long-time sceptic of crypto, argued CBDCs offer something that privately issued digital currencies do not.
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