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BoN authorises virtual assets to promote economic inclusivity

Namibia has taken a step towards financial inclusion by granting provisional authorisation to four entities to provide payment and virtual asset services.

This aims to lower costs and increase access for underserved communities.

According to a statement issued by Bank of Namibia (BoN) spokesperson Kazembire Zemburuka on Monday, Finatic Technologies (Pvt) Ltd and United PayPoint (Pvt) Ltd have been granted provisional authorisation to offer payment services in terms of the Payment System Management Act.

Meanwhile, Mindex Visual Asset Exchange (Pvt) Ltd and Landifa Bitcoin Trade CC have been granted provisional authorisation to operate as virtual asset service providers in terms of the Virtual Assets Act.

Economics researcher Halelluya Ndimulunde said: “This is … financial inclusion for the people who might otherwise not have access to conventional banking services.”

Zemburuka says in the statement: “In line with its regulatory mandate, the BoN is tasked with evaluating all individuals and entities intending to provide payment services and virtual assets services in Namibia.”

He says the regulatory authorisation process involves a two-step approach: upon completion of the assessment, a provisional licence is issued with specific pre-authorisation conditions. Once these conditions are satisfied, a full operational licence is granted.

The provisional licence – which all four entities have been granted – is valid for six months during which entities are required to meet all the conditions necessary for attaining full licencing.

“If an entity successfully meets these conditions within the six-month period, the BoN may issue a full licence, thereby permitting that entity to commence conducting official operations in Namibia.”

Kazembire Zemburuka

He stressed that during the six-month provisional authorisation period, the entities are not allowed to conduct any business or engage individuals or entities in Namibia.

“This restriction ensures that all regulatory compliance requirements are fully met before the entities begin operations,” he said.

The Financial Action Task Force (FATF), an intergovernmental body, defines a virtual asset as a digital representation of an item that has value in a specific environment.

This medium of exchange or property can be digitally traded, transferred or used for payment or investment purposes. The most common example of a virtual asset is virtual currency such as Bitcoin, Litecoin, Ethereum or Dogecoin.

The FATF sets international standards aimed at preventing money laundering and terrorist financing. Part of that effort has been to bring clarity to how virtual assets should be defined and regulated on an international basis.

Getrud Malawi, a Windhoek forex trader, also welcomed the provisional authorisation of virtual assets services providers, saying it is in keeping with global trends.

She said the BoN’s move was a step towards recognising cryptocurrency as legal tender in Namibia.

“As long as it is not used for money laundering, cryptocurrency should be good for the country’s economy as it adds to people’s wealth,” she said, urging people to invest in currencies like Bitcoin.

However, she advised members of the public to learn how to trade themselves instead of asking others to do it on their behalf, as they might lose money this way.

The BoN has consistently said cryptocurrencies are not recognised as legal tender in Namibia.

Efforts to obtain clarification on the status of cryptocurrency from Zemburuka and Bankers Association of Namibia chief executive Brian Katjaerua were unsuccessful at the time of going to print.

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