According to a recent announcement, the BON (Bank of Namibia) has added “VASP (virtual assets service providers) and VA (virtual assets) under the country’s Fintech Innovations Regulatory Framework. However, digital currencies are not yet recognized as a legal means of exchange in Namibia.
BON Considering Amending Crypto Regulation
Last month, the BON said digital currencies like BTC are not yet legalized in the country. However, dealers and retailers can choose to accept digital currencies. This will depend on if the dealer is willing to accept such currencies.
Moreover, the central bank stated that it is considering adjusting relevant legislation and regulations. The BON said it would make these adjustments in conjunction with other appropriate authorities.
Meanwhile, the new position the bank has taken on digital currencies is good news. It could imply that the BON is opening up to digital currencies.
Previously, the central bank said it does not support, advocate, or recognize the usage, trade, or possession of crypto by Namibians.
The financial institution also cautioned the public, especially those into crypto investment. It told the people that if they lost their funds, there would be no legal redress.
Furthermore, Johannes Gawaxab, the governor of Namibia’s central bank, commented on the current state of money. Before now, the governor has always been skeptical of the crypto sector.
BON Governor Comments On The Future Of Money
Gawaxab noted that money has hit a crucial crossroads in the recent announcement. Explaining his statement, the governor stated:
“The form that money will take in the long term is currently at a crossroads. Currently, there are two sides to the struggle. On one hand, the fight is between non-sovereign and sovereign money. On another hand, there is a struggle between unregulated and regulated money.”
Meanwhile, Gawaxab argued that CBDCs (central bank digital currencies) provide unique functions. He added that privately issued digital currencies could not offer such features.
However, the governor emphasized that his establishment would not rush into it. The BON is currently investigating and assessing the feasibility of introducing a CBDC.
According to Gawaxab, CBDCs have great potential, which could benefit Namibia. The governor believes CBDCs could offer a safer, more stable, available, and less costly payment method.
This potential is better compared to what is obtainable with private kinds of digital money. However, proper research is needed to ensure they are deployed properly.
Additionally, the BON disclosed that it is edging closer toward CBDC adoption. However, the central bank said it would distribute a CBDC consultation paper in October. This paper aims to evaluate the chances of launching a CBDC in Namibia.
