The Bank of Namibia (BoN) has announced that digital currencies such as Bitcoin can now be used as forms of payment.
Although these currencies are still not recognised as legal tender in the South African country, BoN said merchants can accept payment in the form of cryptocurrencies. The Bank made the disclosure during an event on Central Bank Digital Currencies (CBDCs) and Virtual Assets (VAs) held on September 22, 2022.
Recall that in 2018, BoN disclosed that it is "strongly against the use of cryptocurrencies[pdf] as a method of payment for goods and services and the exchange to the Namibia Dollar."
Kazembire Zemburuka, the Director of Strategic Communications and International Relations at Bank of Namibia told Benjamindada.com that "Virtual currencies remain without legal tender status in Namibia. The Bank does not recognise the use and acceptance of virtual assets as legal tender or as electronic money in Namibia."
Announcing its updated position on Virtual Assets and Virtual Assets Service Providers (VASPs) in a statement seen by Benjamindada.com[pdf], Zamburuka said that: "the acceptance of VAs for the payment of goods and services remains at the discretion of any merchant and buyer willing to participate in such an exchange or trade agreement.
He added that this type of agreement can be associated with “Bartering” where goods or services are exchanged for other goods or services."
However, BoN hinted that there could be upcoming changes to applicable laws and regulations, in consultation with the relevant authorities—a complete reversal of the bank's previous stance on cryptocurrencies. "The Bank will pronounce itself on its position on these concepts and innovations," Zamburuka said in an email to Benjamindada.com.
Bank of Namibia does not recognise the use and acceptance of cryptocurrencies as legal tender in Namibia.
According to him, "to ensure a progressive regulatory response to the exponential growth in VAs, the Bank of Namibia has brought VAs and VASPs under its FinTech Innovations Regulatory Framework in a phased approach, through its Innovation Hub. In that regard, the Bank of Namibia will engage VASPs under its Regulatory Sandbox and consider the amendment of applicable laws and regulations diligently in consultation with other relevant authorities such as NAMFISA."
In July 2022, the first Bitcoin ATM in Namibia became operational at Maerua Mall in Windhoek via the Crypto Kiosk. According to reports, The Crypto Kiosk operates in full compliance with the Namibian Financial Intelligence Centre, and all applicable Namibian and international laws.
According to the Governor of the Bank of Namibia, Johannes !Gawaxab, "The future of money is at an inflexion point. The battle between regulated and unregulated money on the one hand, and sovereign versus non-sovereign money on the other."
He further reiterated that the essence of a currency in all its manifestations, be it notes, coins or a CBDC, is backed by the trust that it is a safe and secure medium of exchange and that the best and most equipped institution to inspire confidence is the central bank even in the digital era.
In a tweet, Binance's CEO Changpeng Zhao who recently appointed a global advisory board—including two Africans—to tackle the most complex regulatory, compliance, political, and social issues, expressed excitement about the development. "Slowly, but surely," he tweeted.