Cryptocurrency firms will soon operate under a more streamlined regulation in Namibia, with the country in July sanctioning a Virtual Assets Act. This marks quite a milestone from 2017 when the central bank’s stance was that crypto exchanges were illegal due to the absence of provisions. Under said Act, a regulator is set to oversee the sector and licensed companies will be deemed compliant with the Financial Intelligence Act’s anti-financial crime parameters and the Companies Act.
Though deemed exciting and forward-thinking, the Act has been compared to a “skeleton” due to its lack of muscularity. While a regulator is set to oversee the sector, they still remain unselected and the mysterious silence on how crypto would be treated by regulators could deter blockchain companies from launching ventures in Namibia. You can’t help but feel a dash of skepticism, particularly when peer nations, South Africa included, seem to be miles ahead in the establishment of definitive laws for the sector.
Firms seeking to operate in Namibia will need a license, the terms of the license stipulate that companies must be local, face up to 10 years of imprisonment or cough out up to 10,000,000 Namibian dollars ($671,572) in event of non-compliance. These sanctions illustrate a certain seriousness about crypto governance; though more needs to be done. Consumer protection, market abuse mitigation and money laundering prevention are a few sectors set to benefit from the Act.
The Virtual Assets Act paints Namibia in proactive hues, though it is only the initial stride towards a comprehensive regulatory strategy. According to Ronald Nanub, economist at the Office of the Prime Minister in Namibia. In the same breath, Nanub believes the country ought to moot a crypto taxation framework as currently the country doesn’t tax digital assets, even capital gains. Complementing this should be a commission or compliance body that ensures adherence to policies.
Understandably, flexibilities in the Act have been praised, but Jamie Theron of DLA Piper Africa (ESI) objects to those regulatory powers being overextended. The Act does remain largely open in certain areas which prompts suggestive solutions like how banks should treat fintech and advising that merchants should be allowed to accept crypto payments. These servings of food for thought will hopefully stimulate action towards a more progressive certainty in future legislative endeavors in Namibia.
The Act takes effect on a date yet to be disclosed by the Namibian finance minister. While the newly chiseled pathway might be rough and rocky, it can certainly provide a firm foundation for future construction towards an accommodative and adaptive framework for the cryptocurrency industry.
Source: Coindesk
