Namibia Passes Law on Regulating VASPs in Country

Namibia decided to give the crypto industry to thrive after banning it in 2017. The Namibian government signed a law that regulates the virtual asset service providers operating in the country.

The Namibian Virtual Asset Act 2023 had been published in the official gazette after being approved in Namibia’s National Assembly on July 6 and signed by President Hage Geingob on July 14. The African country’s Ministry of Finance will set a date for the law to enter into force.

The Namibia Virtual Asset Act 2023 aims to set up a regulatory authority to supervise crypto exchanges in the country and related activities for purposes of ensuring consumer protection, preventing market abuse, and preventing or mitigating the risk of money laundering and financing of terrorism and proliferation activities posed by virtual assets markets; and to provide for incidental matters.

It is considered the first law that lays the foundations of crypto regulation in the country, according to Cointelegraph.

The virtual asset service providers, who will not comply with the new law, will face penalties of up to $671,000 (10 million Namibian dollars) and 10 years in prison. However, the Bank of Namibia, the central bank of Namibia, maintained its position that cryptocurrencies would not hold legal tender status in the country.

Earlier in November, the International Monetary Fund (IMF) called for more regulation of the crypto industry and greater consumer production in African countries, according to a blog published by the global financial institution.

IMF referred to policymakers’ concerns that cryptocurrencies could be used to illegally transfer funds out of Africa and get around local rules to prevent capital outflows. The blog said: “Widespread use of crypto could also undermine the effectiveness of the monetary policy, creating risks for financial and macroeconomic stability.”

Despite being one of the fastest-growing crypto markets in the world, Africa’s crypto market is still the smallest in terms of crypto transactions reaching $20 billion per month in mid-2021, according to Chainalysis. Africa’s crypto market increased in value by more than 1,200% between July 2020 and June 2021.