Virtual Assets ‘Remain Without Legal Tender Status’ but Merchants Can Still Accept Them as Payment – Africa Bitcoin News

Recent statements by the Bank of Namibia indicated that they have brought virtual assets under their fintech innovation regulatory framework and plans to amend any applicable laws. According to the central bank’s governor, there is an ongoing “battle between regulated and unregulated money on the one hand and sovereign versus non-sovereign money on the other.”

Modifying applicable laws

The Bank of Namibia (BON) has said that while cryptocurrencies have no legal tender status in the country, it has now brought “virtual assets (VA) and virtual assets service providers (VASP) under its Fintech Innovations Regulatory Framework in a phased approach, through its innovation hub.” The central bank added it is also considering amending “applicable laws and regulations diligently in consultation with other relevant authorities.”

In a recently issued statement, the BON also clarified that even though privately issued digital currencies are still not legally recognized, merchants and traders can accept payment in this form provided they are “willing to participate in such an exchange or trade.”

The bank’s new position on digital currencies appears to suggest the BON may be warming up to cryptocurrencies. As reported by Bitcoin.com News, the central bank has in the past said it did “not recognise, support and recommend the possession, utilisation and trading of cryptocurrencies by members of the public.” The bank also warned Namibians there would be no legal recourse in the event they lost money.

CBDCs Hold ‘Immense Potential Benefit’

Johannes Gawaxab is the BON Governor and an ex-critic of cryptocurrency. However, he is mentioned in the statement as acknowledging that the future is critical. He explained:

It is a pivotal moment in the history of money. There is a battle for money between unregulated and regulated, sovereign and non-sovereign.

Gawaxab stated that he thinks central bank digital currency (CBDCs), offer something private digital currencies can’t. However, the BON Governor cautioned that his institution, which is currently studying and exploring the possibility of establishing a CBDC will not rush to do so.

“If CBDCs are explored and implemented with due care and caution, they could hold immense potential benefit for a more stable, safer, more widely available, and less expensive means of payment than private forms of digital money,” said Gawaxab.

In the meantime, BON disclosed that it was planning to publish a consultation paper about CBDCs in October.

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Terence Zimwara

Terence Zimwara was a Zimbabwean award-winning journalist and author. His writings have covered the economic problems of several African countries and how digital currency can offer an escape route.