Namibia enacted the country’s first legislation to license and regulate Virtual Asset Service Providers (VASPs) and Initial Token-Offering Service Providers (ITOSPs). Namibia thus became the 3rd Sub- Saharan African country to take bold legislative steps to regulate this sector and fully protect the public against potential risks, services availed by this industry, may hold.

The Virtual Assets Act, 2023 (Act No. 10 of 2023) (VAA) became operational on 25 July 2023 and will be administered by the Bank of Namibia

Before the landmark legislation was enacted, Namibia determined virtual assets as a growing threat avenue for generating and laundering proceeds of crime, with the banking sector and members of the public, being the major target. In this regard, the Act attempts to reduce the risks associated with investing in virtual assets, which the Bank of Namibia (BoN) has previously warned the public against.

The Minister of Finance and Public Enterprises, in terms of section 5 of the VAA, has designated the Bank as the prudential Regulating Authority of the industry. In this role, the Bank shall prudentially license, regulate and supervise VASPs and ITOSPs. The Bank, in effectively executing this prudential licensing and supervisory role, will implement world-class systems to thoroughly dispose of its mandate.

As for virtual currencies, these will not enjoy legal tender status such as that accorded to the Namibian Dollar. Acceptance of virtual currencies for the payment of goods and services will be at the discretion of any merchant and buyer willing to participate in such an exchange or trade.