Virtual currencies still not legal tender in Namibia – BoN

The Bank of Namibia (BoN) says the passing of the Virtual Asset Bill does not provide any form of validation for the regulation or legalisation of virtual currencies.

“Virtual currencies remain without legal tender status as the Bank does not recognise the use and acceptance of virtual assets as legal tender or as electronic money in Namibia,” BoN

Director for Strategic Communications and International Relations, Kazembire Zemburuka told The Brief. 

This comes after Parliament passed a virtual asset bill last week which is meant to protect consumers from being victims of financial crimes.

“At present, the Financial Intelligence Centre (FIC) supervises Virtual Assets Service Providers (VASPs) in this space in as far as Combating Money Laundering, Terrorist and Proliferation Financing activities is concerned.” said Zemburuka.

He further cited that the nature of virtual assets as it currently exists in Namibia,does not allow for any regulation,hence the enactment of the bill.

“The nature of Virtual Assets (VA) is such that almost any person with the right technology at their disposal and understanding can simply enter the sector as a service provider without undergoing prudential licensing and regulation from regulatory bodies such as the Bank of Namibia and NAMFISA.” said Zemburuka.

The lack of regulatory infrastructure has resulted in a loss of funds with no means of recourse for members of the public.

“There is thus a vacuum in as far as prudential licensing and regulation is concerned resulting in increased financial crimes risks, fraud etc., as anyone, regardless of their standing or those illicit intentions may simply start availing such service on any blockchain.”

He further stated that when used correctly, the technology on which Virtual Assets operate can enhance financial inclusion. 

“The Bank does recognize the potential of virtual assets to foster financial inclusion, make payment systems more resilient and affordable and enhance cross-border payments. When the associated risks that comes with innovations such as VAs are better managed, the Bank will make the necessary assessment and pronounce itself on their acceptance,” the BoN Spokesperson said. 

“This makes it an attractive platform for public consumers hence the Bill aims to reduce financial risks in that space, thereby enhancing financing inclusion. Virtual Assets operate on blockchains around the world and Namibians are free to participate in such operations. This Bill will regulate the conduct of VASPs based in Namibia and those who may not be based in Namibia but target Namibian audiences. This is the standard around the world in terms of regulations.”

 

 

 

 

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