DeFi protocol frontend in Botswana

The Virtual Assets Act, 2025 now provides the overarching legal framework for virtual assets and VASPs in Botswana, vesting NBFIRA with supervisory powers and licensing requirements.

Virtual Assets Regulations, 2023 (VAR 2023): These regulations provide the detailed operational and licensing requirements, including application procedures, capital requirements, AML/CFT obligations, and ongoing supervisory standards. The VAR 2023 became effective on May 26, 2023.

Legal Entity and Local Presence:

Applicants must be a company incorporated in Botswana under the Companies Act.

They must maintain a physical office in Botswana.

Senior management and key personnel are expected to be based in Botswana or demonstrate sufficient local oversight.

The VAR 2023 specifies minimum capital requirements based on the scope of activities:

Principal VASP License: BWP 500,000 (Botswana Pula) in unimpaired capital. This typically covers the full range of VASP activities.

Limited VASP License: BWP 200,000 in unimpaired capital. This may be for VASPs with a narrower scope of activities or those determined by NBFIRA to pose lower risk.

In addition to capital, NBFIRA may require a security deposit or other financial guarantees to protect clients.

Entities that facilitate the transfer of virtual assets on behalf of another natural or legal person (e.g., sending/receiving virtual assets as a payment service, or processing virtual asset transactions) are considered VASPs and require a license. This encompasses services that act as intermediaries for virtual asset payments.

Payment Processors (Transfer of Virtual Assets):

Botswana is actively tightening its AML/CFT financial sanctions regime to address identified weaknesses, indicating the framework is being reformed rather than remaining a stable cornerstone already fully aligned with FATF standards.

Robust Policies and Procedures: VASPs must implement comprehensive internal AML/CFT policies, procedures, and controls.

AML/CFT Compliance Officer: Appointment of a qualified and experienced AML/CFT Compliance Officer, approved by NBFIRA, who reports to senior management and the Board.

Customer Due Diligence (CDD): Implementing strong CDD measures for all customers, including identifying and verifying the identity of natural and legal persons, and beneficial owners.

Enhanced Due Diligence (EDD): Applying EDD for higher-risk customers or transactions.

Record Keeping: Maintaining records of customer identification data, transaction data, and business correspondence for at least 5 years.

Financial Intelligence Act (FIA), No. 17 of 2019: This Act establishes the Financial Intelligence Agency (FIA) and outlines the obligations of accountable institutions (which now explicitly include VASPs) regarding customer due diligence, record-keeping, and suspicious transaction reporting. It replaced the 2009 Act.

NBFIRA's Virtual Assets Business Regulatory Framework and Guidance Notes: NBFIRA has issued a comprehensive framework and specific guidance notes, such as the "Guidance Notes on Anti-Money Laundering and Combating the Financing of Terrorism for Virtual Asset Service Providers" (e.g., published in November 2022), which directly detail AML/CFT obligations for VASPs. These are crucial for specific requirements.

Identification and Verification of Customers:

Beneficial Ownership Identification:

Ongoing Due Diligence and Monitoring:

Botswana’s current dedicated virtual‑asset legislation is the Virtual Assets Act, 2025 (Act No. 4 of 2025, S.I. 9 of 2025), which regulates the sale and trade of virtual assets and the licensing of virtual asset service providers and issuers of initial token offerings; the earlier citation to a “Virtual Assets Act, 2022 (Act No. 19 of 2022, published in the Botswana Government Gazette on 27th May 2022)” is no longer accurate as the operative Act is now the 2025 statute.

Section 5: Prohibits any person from carrying on a virtual asset business or virtual assets service without a license issued by NBFIRA.

Section 3 (Definitions): Defines a "virtual asset service provider" (VASP) to include any person who, as a business, "provides custody or administration of virtual assets or instruments enabling control over virtual assets."

NBFIRA Advisory on Virtual Assets and Virtual Asset Service Providers (July 2021): https://www.nbfira.org.bw/news-media/media-releases/advisory-virtual-assets-and-virtual-asset-service-providers

Non-Bank Financial Institutions Regulatory Authority (NBFIRA) is the primary established regulator for Virtual Asset Service Providers (VASPs) under Botswana's Virtual Assets Act, 2025. However, Botswana-specific evidence does not explicitly confirm that NBFIRA has been active in issuing public warnings.

Botswana enacted the Virtual Assets Act, 2025, which vests the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) with supervisory powers and requires VASPs to be licensed, representing a fully enacted framework rather than the still-implementing 2022 bill.

Issuing warnings and advisories to the public about the risks associated with cryptocurrencies and unregistered virtual asset service providers (VASPs).