Tuesday, November 29, 2022

Bank of Namibia Says Merchants May Accept Virtual Assets Based on Discretion

Namibia’s central bank, otherwise known as Bank of Namibia (BON) has announced that merchants or buyers who wish to accept virtual assets like Bitcoin (BTC) and Ethereum (ETH), can do so based on their discretion. 

This announcement was made during the Thought  Leadership Event hosted by BON to discuss Central Bank Digital Currencies (CBDCs) and Virtual Assets (VAs).

According to BON, the Southwest African country does not have a legal tender status for virtual assets. Rather, the central bank decided to add both VAs and Virtual Assets Service Providers (VASPs) under the FinTech Innovations Regulatory Framework in a phased approach. This is to ensure a regulatory response to the growth of the crypto industry in Namibia. 

It was based on this new development that merchants were permitted to accept digital currencies for trade and exchange if they wish. As per the published statement,

“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.”

Bank of Namibia Explores CBDC Use Cases

Also, BON reiterated its stance on Initial Coin Offerings (ICOs). The bank said that it is risky and exposes one to fraud, cyber thefts, and manipulations. Therefore, BON does not support its citizens’ or merchants’ engagement with ICOs. 

Ultimately, the discussion of BON was aimed at creating balance in the financial ecosystem to ensure trust and stability. The bank identified a need to manage the risks associated with digital assets. To do this, BON decided to defend the regulated money and rein in unregulated finance. It is also mulling the idea of developing and adopting CBDC.

So far, some considerations in adopting a CBDC are whether it offers a fit-for-purpose solution that supports public policy objectives. Meanwhile, the central bank has identified key benefits of the CBDC like financial inclusion, time reduction as well as cost reductions. Additionally BON believes that implementing a CBDC will be efficient for retail payments.

The Governor of BON Johannes Gawaxab noted that there are still some uncertainties surrounding the use Of CBDCs. He affirmed that any form of money whether coin or CBDC, should offer a form of safety and security as a medium of exchange. Governor Gawaxab said,

“The future of money is at an inflection point. The battle between regulated and unregulated money on the one hand, and sovereign versus non-sovereign money on the other.”

 

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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