Virtual currency not legal in Namibia: BoN

11 Sep 2017 18:30pm
WINDHOEK, 11 SEP (NAMPA) – The rising interest in the use of virtual currency has forced the Bank of Namibia (BoN) to warn Namibians that virtual currencies are not accepted as legal tender in Namibia.
The BoN said in a media statement issued Monday that only two currencies are accepted in Namibia: Namibian Dollar and South African Rand.
Like electronic money, virtual currency is also presented in digital form, but it is not the same.
BoN Deputy Director for Corporate Communications Kazembire Zemburuka told Nampa on enquiry Monday that the main difference between the two is that electronic money is a digital form of a country’s legal tender currency backed and issued by a central authority, while virtual currencies are not backed by any legal tender currency or central authority.
Virtual currencies are not to be considered equivalent to the Namibian currency, and individuals engaged in such trading do this at their own risk, the BoN warned.
The bank said virtual currencies are considered unsafe to users that are unaware of the risks such as credit, liquidity, operation, and legal risks.
“Users of virtual currencies should also be aware of risks related to money laundering and the financing of terrorism when engaging in the trading of virtual currencies,” the BoN warned.
The value of virtual currency is derived from their common acceptance among a group of natural or legal persons as a means of payment that can be transferred, stored, or traded electronically.
The bank, however, recognises the potential positive impact that distributed ledger technologies might have in Namibia and as such, intents to conduct further research on the possible use of such technology.
A distributed ledger is a database shared and synchronised across networks, spread across multiple sites, institutions or geographies and is used to provide a history of transactions associated with the use of a particular unit of decentralised virtual currency.