The Bank of Namibia recently said it plans to bring virtual assets and virtual asset service providers under the regulatory framework of fintech innovation and amend applicable laws and regulations. According to the central bank governor, there is an ongoing “battle between regulated and unregulated money on the one hand and sovereign versus non-sovereign money on the other.”
While cryptocurrencies do not have the status of legal tender in the country, the Bank of Namibia (BON) is currently working to “bring virtual assets (VAs) and virtual asset service providers (VASPs), through the Innovation Hub, under a phased approach to under the FinTech Innovation Regulatory Framework”. The central bank added that it is also “seriously considering amending applicable laws and regulations in consultation with other relevant authorities.”
In a recently releasedstatement, the BON also clarified that BON also clarified that while privately issued digital currency is not yet legally recognized, it can accept payments in this form provided that merchants and traders are “willing to participate in such exchanges and transactions.”
The bank’s new position on digital currencies appears to suggest that the BON may be warming to cryptocurrencies; as Bitcoin.com News reported, the central bank has in the past “recognized, supported and encouraged the ownership, use and trading of cryptocurrencies by the general public It states that it does not do so.” The bank also warned that it would not provide Namibians with legal recourse if they lost their money.
CBDCs have “immense potential profits”
However, Johannes Gawaxab, president of BON and a past critic of cryptocurrencies, is quoted in a statement acknowledging that the future of money is now at a critical point. He explains it this way.
The future of money is at an inflection point. On the one hand, it is a battle between regulated and unregulated money; on the other hand, it is a battle between sovereign versus non-sovereign money.
{But Gawaxab said he believes that the Central Bank Digital Currency (CBDC) offers something that privately issued and created digital currencies do not. Nevertheless, the BON president cautioned that the organization, which is exploring and studying the possibility of deploying CBDC, is not in a hurry to do so.
“If CBDC is studied and implemented with sufficient care and prudence, it could have immense potential benefits as a more stable, secure, more widely available and cheaper means of payment than private forms of digital money,” Gawaxab said.
Meanwhile, BON revealed that it plans to release a consultation paper on CBDC in October.
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