Stablecoin issuer / redeemer in Namibia

Not Legal Tender: As per the BoN's statement, stablecoins (like all VAs) are not legal tender in Namibia.

Potential as E-money/Payment Tokens: The BoN has explicitly stated that stablecoins could potentially be classified as "electronic money" (e-money) if they meet the criteria stipulated in the Payment System Management Act, 2003 (Act No. 18 of 2003). This would apply if a stablecoin is pegged to the Namibian Dollar or another fiat currency, and is intended to be used as a means of payment.

Potential as Securities: Depending on their structure, especially if they represent an ownership interest in a reserve asset pool, confer rights to profits, or are offered as an investment product, stablecoins could potentially be classified as "financial instruments" or "securities" under the Financial Institutions and Markets Act, 2021 (FIMA). FIMA is a comprehensive piece of legislation regulating the broader financial services industry and markets in Namibia.

Other Virtual Assets: If a stablecoin does not fit the e-money or securities definition, it would likely be categorized as a general "virtual asset" as defined by the BoN, which currently awaits a dedicated VASP regulatory framework.

Bank of Namibia (BoN) Statement on Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs): While a direct permanent URL to the official press release might change, the essence is widely reported and forms the basis of their current policy. Look for news archives or publications section on the BoN website around Feb/March 2023. A typical search query would be "Bank of Namibia virtual assets statement 2023".

Payment System Management Act, 2003 (Act No. 18 of 2003): This Act governs payment systems and e-money in Namibia.

Financial Institutions and Markets Act, 2021 (FIMA): This Act regulates financial institutions and markets.

No Specific Stablecoin Reserve Requirements (Yet): As there is no dedicated stablecoin legislation, specific reserve requirements for stablecoin issuers do not exist yet.

If Classified as E-money: If a stablecoin is classified as e-money, it would likely be subject to the reserve and safeguarding requirements applicable to licensed e-money issuers under the Payment System Management Act, 2003. These typically involve holding equivalent fiat currency reserves in segregated accounts to ensure 1:1 backing and liquidity.

Future VASP Framework: The BoN's ongoing work to develop a regulatory framework for VASPs is expected to include specific rules on financial stability, consumer protection, and potentially reserve requirements for any stablecoins issued or facilitated by regulated VASPs.

No Specific Stablecoin Issuer License (Yet):

If Classified as E-money: Issuance of e-money requires a specific license from the Bank of Namibia under the Payment System Management Act, 2003.

If Classified as a Security: Offering a stablecoin classified as a security would require compliance with the licensing and registration requirements for financial services providers under the Financial Institutions and Markets Act, 2021.

Future VASP Licensing: The BoN has explicitly stated its intention to require Virtual Asset Service Providers (VASPs) to be licensed and regulated. While this primarily targets exchanges, custodians, etc., an entity issuing a stablecoin might also fall under VASP definition, or require an e-money or securities license. The upcoming VASP framework will clarify this.

No Specific Stablecoin Redemption Rights (Yet):

If Classified as E-money: The Payment System Management Act, 2003 typically mandates that e-money must be redeemable at par value on demand. If a stablecoin is deemed e-money, these rights would apply.

If Classified as a Security: Offering a stablecoin classified as a security would require compliance with the licensing and registration requirements for financial services providers under the Financial Institutions and Markets Act, 2021.

CBDC Exploration: The Bank of Namibia has publicly announced its exploration of a Central Bank Digital Currency (CBDC). This initiative is part of a broader global trend and is seen as a way to potentially enhance financial inclusion, efficiency, and resilience of the payment system.

Financial Intelligence Act, 2012 (Act No. 13 of 2012) as amended by the Financial Intelligence Amendment Act, 2017 (Act No. 2 of 2017): This is the cornerstone of Namibia's AML/CFT framework. It establishes the Financial Intelligence Centre (FIC), defines money laundering and terrorist financing offenses, sets out reporting obligations, and outlines due diligence requirements for accountable institutions.

Financial Intelligence Regulations, 2017: These regulations provide further details and procedures for implementing the Financial Intelligence Act.

Identification and Verification of Customers:

Natural Persons: Obtain full name, date of birth, residential address, nationality, identification number (e.g., national ID, passport). Verify identity using reliable, independent source documents, data, or information (e.g., government-issued ID, utility bills).

Legal Persons/Arrangements (Companies, Trusts): Obtain name, legal form, proof of existence, powers that regulate and bind the legal person/arrangement, and the names of relevant persons holding senior management positions.

Beneficial Ownership: Identify and verify the identity of the beneficial owner(s) of the customer, ensuring that VASPs understand the ownership and control structure of the customer. This involves identifying the natural person(s) who ultimately own or control the customer, and/or on whose behalf a transaction is being conducted.

Purpose and Nature of Business Relationship: Understand the purpose and intended nature of the business relationship or occasional transaction.

Ongoing Monitoring: Conduct ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions are consistent with the VASP's knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

Enhanced Due Diligence (EDD): Apply EDD in higher-risk situations, which typically include:

Politically Exposed Persons (PEPs).

Customers from high-risk geographic areas (as identified by FATF or FIC).

Complex, unusually large transactions, or unusual patterns of transactions that have no apparent economic or lawful purpose.

Relationships with shell companies.

Transactions involving new technologies or products that favor anonymity.

Travel Rule: Although specific regulations may be pending, consistent with FATF Recommendation 16 (the "Travel Rule"), VASPs should be prepared to obtain and transmit required originator and beneficiary information for virtual asset transfers above a certain threshold (typically EUR/USD 1,000 or equivalent).

Reporting Threshold: There is no monetary threshold for reporting suspicious transactions. Any transaction (or attempted transaction) that gives rise to a suspicion of money laundering or terrorist financing, regardless of the amount, must be reported.

Content of Report: The report must include all relevant information known to the VASP regarding the customer, the transaction, and the reasons for suspicion.

"No Tipping-Off": VASPs and their employees are strictly prohibited from disclosing to the customer or any third party that an STR has been, or will be, submitted.

Customer Identification Records: Copies of all documents used for customer identification and verification (e.g., ID cards, passports, utility bills, company registration documents).

Transaction Records: Details of all transactions conducted by the VASP, including amounts, types of virtual assets, dates, sender and recipient information, and any associated messages. This includes both successful and attempted transactions.

Business Relationship Records: Records pertaining to the establishment and duration of business relationships.

Analysis and Decision Records: Records of any internal analysis undertaken regarding suspicious activity, and decisions made regarding whether or not to file an STR.

STRs Submitted: Copies of all suspicious transaction reports filed with the FIC.

Financial Intelligence Centre (FIC) Namibia