by Jude Ayua

The Bank of Namibia (BoN) announced on 13 January 2025 that it has granted provisional licenses to two virtual assets service providers (VASPs), Mindex Virtual Asset Exchange (Pty) Ltd. and Landifa Bitcoin Trade CC. The grant is in accordance with BoN’s regulatory mandate under the Virtual Assets Act 2023, tasking the bank with evaluation of individuals and entities intending to provide virtual asset services within the country.

The regulatory authorisation process for VASPs is in two stages: the provisional license and operational license. Upon completing a preliminary assessment, the bank issues a provisional license with specific pre-authorisation conditions. Once a provisional license holder has satisfied those conditions, the bank can then grant a full operational license. 

Duration for the provisional license

The provisional license is valid for six months, during which the holder must meet the pe-authorisation conditions necessary for final approval. Also, during the six-month provisional license period, the holders are restricted from conducting any business or dealing with individuals or entities in Namibia. This restriction is necessary to ensure that provisional license holders meet the full regulatory compliance requirements before they begin their operations. 

The BoN noted in its press release that it remains committed to fostering a secure and regulated financial environment in the country and will continue to provide updates on the progress of the provisionally approved VASPs.

Read also: South Africa’s FSCA approves 248 crypto operators.

BoN’s Director for Strategic Communications and International Relations, Kazembire Zemburuka, emphasizing the expectations for the VASPs, noted, “If they are ready before the six months, the bank can inspect their setup and once approval is granted, they can engage the public.”

BoN’s crypto regulation journey

In 2018, the BoN stated that it opposed the use of cryptocurrencies as a payment method within Namibia. The bank changed its position in 2022, announcing bitcoin (BTC) could be used for payment at the merchant’s discretion notwithstanding BTC’s non-legal status in the country.

Following the allowance of cryptocurrency payments, Namibia’s finance ministry announced the government’s plans to introduce a regulatory framework for virtual asset activities and VASPs in the country. Meanwhile, BoN maintained that cryptocurrencies had no legal status in the country, regardless of the framework set that was under way. In July 2023, the Namibian National Assembly passed the Virtual Assets Bill to recognize  virtual assets and regulate VASPs despite the BoN’s conservative stance.

Virtual Assets Act 2023

The Virtual Assets Act 2023 designates the BoN as the primary regulator with the authority to license and supervise among VASPs. It also confers BoN with powers to inspect, investigate, and enforce compliance through appointed inspectors. The Act requires VASPs must obtain an operating license after meeting the requirements on financial stability, technical capabilities, and management competence. It mandates VASPs to protect client assets, prevent market abuse, and ensure transparency in virtual asset transactions and implement measures for anti-money laundering and combating the financing of terrorism (AML/CFT). The Act prohibits market manipulation. It stipulates fines up to N$10 million and imprisonment for non-compliance with licensing and operational standards.

Read also: Nigeria’s SEC issues ‘Approvals-in-Principle’ to digital assets exchange firms.

Related developments

Namibia’s recent move to regulate VASPs in the country aligns with the ongoing efforts by other African countries like Kenya, Nigeria, and South Africa who are accepting virtual asset operations by implementing applicable regulations.

In August 2024, Nigeria’s Securities and Exchange Commission granted provisional licenses to two digital asset exchanges. In December 2024, South Africa’s Financial Services Conduct Authority announced its approval of 248 crypto asset service providers. In January 2025, the Central Bank of Kenya issued a public notice inviting feedback on its proposed framework for virtual assets.

BoN is also considering a central bank digital currency (CBDC). In October 2022, the BoN’s governor disclosed the bank’s plans for a CBDC followed by its consultation paper in early 2023 and a call for public input.

As more African countries continue to implement regulations for the virtual asset industry, government regulators should keep in mind the need to sustain technological innovation in the financial sector while ensuring compliance, public education, and investor protection. Effective regulation of the industry will potentially enhance financial inclusion and boost economic development in Africa.

Read Also: Kenya seeks consultation on virtual assets regulations following IMF technical assistance report.

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Jude Ayua is a policy analyst at CAB. A lawyer, Jude is an associate at Infusion Lawyers where he is a member of the Blockchain & Virtual Assets Group. He is also a member of the Policy & Regulations Committee of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN). Jude reports and writes on crypto policy and regulations. jude@infusionlawyers.com

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