The Namibian government has greenlighted the Namibia Virtual Assets Act of 2023 bill into law. The bill was enforced into law on July 14 after President Hage Geingob issued his final assent.
Consecutively the bill has undergone various legislative processes before the presidential assent. On July 6, the members of the Namibian National Assembly reviewed and approved the bill.
The drafted regulation was later submitted to President Geingob for approval. Guided by the Namibian law-making process, the legislators have officially published the approved legislation in the ” Republic Gazette of Namibia.”
Even though the bill has completed the legislative approval process, in Namibia the Ministry of Finance has complete authority to schedule the dates to implement the new law.
Summary of Namibia Virtual Assets Act 2023
Under the bill, President Geingob has granted the regulatory authority power to monitor the operation of local crypto exchanges. The new legislation outlines the procedure for regulating crypto activities in Namibia.
The new regulation highlights the punitive measure the regulators will take to ensure compliance. The new rule mentioned that non-compliant virtual asset service providers (VASP) will face legal action.
According to the bill, non-compliant VASPs will be required to settle a penalty totaling $671000. Depending on the case’s complexity, the VASPs caught in wrongdoing will be placed behind bars for ten years.
In addition, the new legislation grants the Bank of Namibia the legal authority to ensure crypto assets will not be legal tender.
Namibia Amends Laws on Crypto Assets
In 2017 the Namibia government restricted the use of digital assets in the country. Reflecting on the Namibia Exchange Act of 1966, the authority banned the use of cryptocurrency in payment. At that time, the regulator declared that any individual or entity engaging in crypto-related activity would face legal action for violating the old-decade laws.
With the growing interest in crypto assets, the Bank of Namibia agreed to revise the old law in 2018. The bank formulated a proposal on the need to introduce crypto assets to the traditional finance market.
In the proposal, the bank recommended the introduction of digital ledger technologies and crypto to the conventional finance sector. Also, the bank advised the government to invest in creating awareness to the community on the benefits of adopting emerging technologies such as blockchain and crypto.
The bank submission was supported by other regulatory agencies reversing the country’s anti-crypto stance.
Race to Regulate Crypto Assets
The implicit move made by Namibia to push for mainstream adoption of crypto by creating friendly policies has inspired other African countries.
At the beginning of July, South Africa’s government imposed new regulations requiring the local exchanges to seek licenses. An official publication issued on July 5 illustrated that all crypto exchanges in South Africa should be licensed before December this year.
After the deadline, the South African government pledged legal action against non-compliant exchanges.
The South African move mirrors the regulatory actions taken by Botswana, Kenya, Seychelles, and Mauritius to regulate crypto assets. A few months ago, the Central African Republic (CAR) accepted Bitcoin as legal tender.
However, as Namibia joins others in the ongoing push for crypto adoption, other African countries impose restrictive measures on crypto assets. Recent research by the International Monetary Fund (IMF) revealed that Congo, Tanzania, Zimbabwe, and Sierra Leone are enforcing laws to ban crypto.