Remote VASP serving residents in Botswana

Licensing Regime: Botswana operates under a strict licensing regime for Virtual Asset Service Providers. This means that any entity wishing to conduct VASP activities in or from Botswana must apply for and obtain a specific license from NBFIRA before commencing operations. It is not merely a registration process; it involves a thorough application, due diligence, and ongoing compliance.

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.

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.

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.

Proceeds of Serious Crime Act (POCA), Cap 08:06: This is the overarching legislation that criminalizes money laundering and terrorist financing, and provides for the confiscation of proceeds of crime.

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.

Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Guidelines: Issued by the FIA and NBFIRA, these guidelines provide specific instructions for regulated entities, including VASPs, on how to implement their AML/CFT obligations, including sanctions compliance.

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:

Source of funds and source of wealth (especially for high-risk customers or large transactions).

Beneficial Ownership Identification:

Ongoing Due Diligence and Monitoring:

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

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.

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

Outcome: To educate the public about the risks of virtual assets and to caution against engaging with unregistered VASPs. It also served as a notice that a regulatory framework was being developed.

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."