The Bank of Namibia (BoN) says it is still investigating the use of cryptocurrencies in the country, which could contribute to financial inclusion.
Johannes !Gawaxab, the BoN Governor, said the Reserve Bank has seen the rise of cryptocurrency financing services and is now looking at ways of protecting depositors.
“We must ensure that these platforms are reliable for lending, trading, and secure custody with consumer interests well protected. These innovations are bold, and there is considerable promise to reduce transaction costs, increase competition, and improve financial inclusion, but there are also potential risks to that,” he said.
He added that the bank’s continued research into the on-going transformation in the financial sector, through various innovations, will be key in its ability to play its supervisory and regulatory role.
“We are firm in giving the required direction to the industry, innovators, and interested parties as we dive into these unchartered frontiers and cooperate with stakeholders to advance our ambitions in the Fourth Industrial Revolution,” !Gawaxab said.
This comes as the apex bank is also close to completing a consultation paper on its planned introduction of a Central Bank Digital Currency.
“We are doing ground-breaking research on Central Bank Digital Currencies (CBDC), and a consultation paper is nearing completion in order to elicit feedback from interested parties,” the Governor said.
A CBDC is a digital version of a fiat currency that can be deployed in wholesale and retail models, with the potential to reduce transaction costs and ease cross border transfers while also expanding financial inclusion as people with no banking access can use their mobile phones.
!Gawaxab noted that the central bank was leveraging its new strategy to drive the financial services sector’s transformation going forward.
“Through our strategy, the Bank will strive ceaselessly toward a more efficient, responsive, and modernised financial system that is accessible to all ordinary citizens while linked with regional and international financial institutions. As a result of the rapid innovation in the FinTech industry, the Bank has recently released the FinTech Regulatory Framework,” he said.
The pronouncements by !Gawaxab, comes as the apex bank put in place a Digital Transformation and Innovation Committee, which is designed to spearhead, and facilitate initiatives in the Bank, with a long-term view to facilitate the same ambitions in the Financial Sector at large.
