The Bank of Namibia (BoN) and the Namibia Financial Institutions Supervisory Authority (NAMFISA) have established a technical committee to develop a prudential licensing and regulatory framework for Virtual Assets (Vas) and Virtual Asset Service Providers (VASPs).
Kazembire Zemburuka, BoN’s Director of Strategic Communications, said any person who has an innovative business concept can present their ideas to the Bank for consideration against the relevant legislation.
“The Bank has introduced a Fintech Framework or Sandbox environment, which allows any innovative entrepreneurs to approach the Bank for consideration of approval to operate their business models in such a controlled and investigative environment before being granted permission to engage with the public.”
However, despite this positive move towards virtual assets such as cryptocurrencies, Zemburuka said the virtual currencies including Bitcoin remain illegal in Namibia.
“The Bank’s position on cryptocurrencies remains the same. Cryptocurrencies are not a legal tender in Namibia. The Bank does not encourage trading in cryptocurrencies. Furthermore, any mobilisation of public funds by promoters of any scheme without the necessary approvals from the relevant regulatory authorities may violate applicable laws and is thus strongly discouraged,” he added.
Responding to comments that Namibia’s banking sector is over regulated, a position affecting the digital transformation of financial services, Zemburuka said financial institutions in the country are regulated to ensure that they conduct their businesses prudently as per the relevant law.
“The regulation of banks is necessary because in conducting their businesses, banking institutions use deposits from the public or alternative funds from savers and use such funds to lend to borrowers, who must repay such funds with interest, such that savers can get a return on their investments.”
“It is, therefore, necessary to ensure that such deposits are safeguarded by way of the necessary regulations by making sure banks do not put such savings at risk by investing them recklessly. Banks in Namibia are regulated in accordance with international standards, and the Bank disagrees with the perception that such banks are over-regulated,” he said.
