Namibia steps up crypto regulations, grants licenses to two crypto firms

Policy

The country wants these firms to meet its preauthorization requirements before they are fully licensed.

The Bank of Namibia has announced that it is issuing a temporary license to two virtual assets service providers (VASPs) in the country. The two firms are granted operational permission for six months during which they are expected to put their houses in order towards full licensing.

The details

• Namibia’s apex bank asked the two cryptocurrency companies, Mindex Virtual Asset Exchange and Landifa Bitcoin Trade CC to meet all necessary conditions for licensing within the timeframe it provided.
• It added that it reserves the right to approve or reject these companies’ licenses before or at the expiration of the six months.
• In addition, within this period, the companies are only permitted to operate in a regulatory sandbox-like environment and are restricted from conducting business with the public.
• The BoN’s requirements for full licensing and pre-authorization conditions are not immediately clear.

Key quotes

• The bank, through its communications director, Kazembire Zemburuka, wrote:

“During the six-month provisional authorization period, the entities are not allowed to conduct any business or engage with individuals or entities in Namibia. This restriction ensures that all regulatory compliance requirements are fully met before operations begin.”

“Only after six months do they get final approval. In the meantime, they must hire their people and put infrastructure in place. If they are ready before the six months, the bank can inspect their setup and once approval is granted, they can engage the public.”

Catch up

• In June 2023, the Namibian National Assembly passed a bill to recognize and regulate digital assets despite the BoN insisting that it was unmoved by the asset class.
• Iipumbu Shiimi, the country’s minister of finance, said that a governing body would be established to oversee and license VASPs in the country.
• At the time, however, the Bank of Namibia insisted that cryptocurrencies had no legal status in the country regardless of the new regulations that were set to come in place.
• The bill was signed into law a month later, banning all crypto exchanges not based in the country and asking other VASPs to keep information on individuals who transact on their platforms.
• It had earlier announced in 2018 that it was strongly against the use of cryptocurrencies as a method of payment for goods and services.
• However, it repealed the stance in 2022, announcing that bitcoin could be used as a form of payment at the merchant’s discretion despite its non-legal status in the country.