After Namibia’s parliament passed a bill in June which aims to legalise and establish regulations for virtual assets, including cryptocurrency, the bill has been enacted into law by the southern African nation.

The Namibian government has begun the process of setting up a regulatory authority to oversee the virtual asset industry, acting on the provisions of one of the major mandates of the newly passed law. The authority will be responsible for licensing virtual asset service providers and overseeing, supervising, and monitoring activities related to the provision of virtual asset services.

Additionally, according to the law, individuals or entities engaging in virtual asset services without proper registration with the regulatory authority may face penalties of up to N$10 million in fines, imprisonment for a maximum period of 10 years, or both.The bill also aims to ensure consumer protection, prevent market abuse and money laundering.

“The aim of the legislation was to create a regulatory framework to protect consumers, and the risk of money laundering is mitigated,” said Limpumbi Shiimi, the country’s minister of finance and public enterprises.

Central bank warns public

Despite the bill, the country’s central bank, the Bank of Namibia (BoN) warns the public that because virtual assets like cryptocurrencies are not legal tender, people who transact with them do so at their own risk.

However, the bank acknowledges the assets’ role in promoting financial inclusion, improving the resilience and affordability of payment systems, and enhancing cross-border payments.

“When the associated risks that come with innovations such as virtual assets in the financial system are better managed, the bank will make the necessary assessments and pronounce itself on their acceptance,” said Kazembire Zemburuka, spokesperson of the central bank.