Namibia’s Central Bank rules Bitcoin purchases illegal under law

The Namibian Central Bank has ruled that Bitcoin shall be ruled that Bitcoin may not be used as payment for goods and services.

Namibia has cemented itself as one of the first southern African countries to rule on Bitcoin as its Central Bank has now dictated that the cryptocurrency should not be accepted as payments for neither goods nor services.

Through the publication of a position paper, the Bank of Namibia has clarified that it sees Bitcoin – and, by extension, other cryptocurrencies – as a ‘minimal’ threat to the central bank’s monetary policymaking role.

Read: How to buy Bitcoin in South Africa

The paper draws on previous research from the International Monetary Fund and the Financial Action Task Force, and offers policy directives interpreted from the Namibian Exchange Control Act of 1966.

The Act, unsurprisingly, does not make provision for the establishment of virtual currency exchanges within the country.

The paper reads:

“In addition to the bank not recognizing virtual currencies as legal tender in Namibia, it also does not recognize it to be a foreign currency that can be exchanged for local currency. This is because virtual currencies are neither issued nor guaranteed by a central bank nor backed by any commodity.”

The report acknowledges that cryptocurrencies could be used to facilitate remittances and other payments, but offers that:

 “Virtual currencies cannot be used to pay for goods and services in Namibia… For example, a local shop is not allowed to price or accept virtual currencies in exchange for goods and services. Users of virtual currencies should therefore exercise caution when dealing in this type of currencies or when comparing it to e-money.”

South Africa has yet to rule on Bitcoin or propose any new pieces of legislation or regulation – though it recently emerged that the South African government has been trialing cryptocurrency regulation in a sandbox setting.

Read: How to buy Ethereum in South Africa

What are your thoughts? Be sure to let us know your opinion in the comments below!

Follow Bryan Smith on Twitter: @bryansmithSA

Source: CoinDesk

Related Articles

CBDC adoption: Russia enters final phase to test digital ruble

Russia is in the final phase of testing a central bank digital currency (CBDC), which will be used for both national and international...

What exactly is DeFi? Decentralised finance explained

DeFi is a set of technologies that enables people to manage their funds on a peer-to-peer basis and it's changing the way money can be used.

Expansion: Coinbase will be launching in the Netherlands

As part of its global expansion, Coinbase has announced that it has been granted regulatory approval from the Netherlands' national bank.

Is Bitcoin better than retail estate as an investment?

According to MicroStrategy CEO Michael Saylor, Bitcoin presents a much better long-term asset than property.

See All