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Bitcoin exchanges have no place in the country: Bank of Namibia

Bitcoin exchanges have no place in the country: Bank of Namibia

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According to the central bank of Namibia, the virtual currency exchanges have no place in the African country, under its decades-old law.

In brief:

The central bank of Namibia has announced that virtual currency exchanges have no place in the country, under its decades-old law and the merchants should not accept payments in any cryptocurrency.

According to the central bank of Namibia, the virtual currency exchanges have no place in the African country, under its decades-old law. The Bank of Namibia has also directed merchants in the country to not accept any cryptocurrency as payment for goods and services.

The bank says, "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 with this type of currencies or when comparing it to e-money.”

The latest position paper released in September 2017 by the Bank of Namibia states that Bitcoin and other virtual currencies pose a ‘minimal’ threat to the Bank’s monetary policy since they currently have a limited presence in the financial system in the country.

The paper heavily refers to previous research by the Financial Action Task Force (FATF), a global anti-money-laundering organization and the International Monetary Fund (IMF). In addition to this, the bank pointed to the country’s law as well. It claims that the country’s Exchange Control Act of 1966 does not make provision for the establishment of virtual currency exchanges or bureaus in Namibia and thus cryptocurrencies are not authorized in the country.

"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", reads the position paper.

The central bank further highlighted that the use of digital currencies that lack a centralized system of backing by the government or any other institution, pose a potential risk to the users. Besides money laundering, the Bank of Namibia also cites credit, liquidity, legal, and operational risk as threats to its citizens.

 

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