Despite the recent headwinds, the cryptocurrency sector has been making great progress throughout its history. In this respect, it has remained effective in making several jurisdictions realize its potential. As a result of this, the adoption of crypto assets has been increasing day by day around the world. In a recent turn of events, Namibia has turned out to be the new nation to embrace virtual assets.
Namibia Witnesses a Change of Heart and Eliminates Prohibition on Cryptocurrency
The country has adopted these assets by approving legislation that regulates the operations done by the Virtual Asset Service Providers (VASPs) running within the country’s jurisdiction. The legislation was authorized by the legislature of Namibia on the 6th of January. It was approved by the country’s president on the 14th of July. Following that the Gazette of the government made it public on the 21st of July.
The latest Virtual Asset Service Providers (VASP) legislation of Namibia will regulate the operations carried out by the crypto exchanges. Nonetheless, at present, the authorities have not provided any exact date to enact the respective act as the country’s Finance Ministry is busy determining the effective date for the respective law.
The legislation’s introductory portion already offers insight into the target of the law. As mentioned in it, the act intends to provide regulatory authority for the regulation and supervision of VASPs and their related operations. By doing this, the purpose of the legislation is to guarantee client protection as well as the prevention of market abuse.
In addition to this, the act’s focus is on minimizing the hazards related to money laundering as well as terrorism financing. Apart from that, it pays great attention to proliferating operations to be performed within the markets of virtual assets. In line with the legislation, Virtual Asset Service Providers require getting licenses to operate within the country’s jurisdiction.
It also points out that the parties who remain unsuccessful in doing so may go through a penalty. In such a situation, authorities may direct such unlicensed entities to recompense 10M Namibian dollars upon conviction. Another penalty comprises imprisonment for less than ten years. Nevertheless, there still exists a grey area because the Bank of Namibia is consistently resolute to recognize crypto assets as its legal tender irrespective of this latest VASP Act.
Keeping that in view, it is ambiguous if transfers performed in cryptocurrency will be prone to any punishment according to the law. The respective move is considered to be crucial following the pan placed by the country on the crypto exchanges back in the year 2017. The respective prohibition was to keep them from utilizing crypto assets to transfer their funds within the country’s jurisdiction.
Following that, the Central Bank of Namibia announced that these exchanges were operating illegally under the country’s Exchange Control Act of 1966. The agency additionally cautioned the trading parties not to deal with crypto assets such as Bitcoin to pay for services and goods.
Crypto Adoption Gradually Increases within African Jurisdiction
However, the current change of plans coincides with the provision of regulatory certainty concerning the operations of the crypto exchanges within Namibia. This development signifies that Africa’s environment is evolving regarding crypto assets. Additionally, the African nations are preparing to launch cryptocurrency into their financial ecosystem apart from the provision of a regulatory agenda to offer certainty.