Namibia's Central Bank: Bitcoin trading is illegal

Namibia’s central bank said cryptocurrency trading is not allowed in the country under a decades-old law and merchants in the African nation will not accept the payment method in exchange for goods and services.

In a nine-page opinion paper, the Central Bank of Namibia stated that Bitcoin and other cryptocurrencies pose little threat to the central bank’s monetary policy-making position.

Some of the points raised by the country's central bank are already old hat, including the money laundering risks of cryptocurrencies, the shortcomings of currencies that are not backed by a government or commodity economy, and the potential advantages that the underlying technology such as distributed ledgers can bring to the financial system.

The opinion letter extensively cited the findings of the International Monetary Fund (IMF) and the Financial Action Task Force (FATF), a global intergovernmental anti-money laundering body. In addition, the central bank also explained the relevant domestic laws.

For example, the central bank noted that Namibia’s Exchange Control Act 1996 “does not make specific provisions for the establishment of virtual currency exchanges or government agencies in the country.”

The opinion letter states:

In addition to not recognizing virtual currencies as legal tender in Namibia, the central bank also does not recognize them as foreign currencies for trading with local currencies because virtual currencies are not issued or guaranteed by the central bank and are not backed by any commodity economy.

While the document also acknowledges the role of cryptocurrencies in interfacing with fiat currencies in remittances and other consumer payment activities, it states that “due to the lack of legal prerequisites, the Central Bank is currently unable to authorize such activities in Namibia.”

Apparently, even exchanging Bitcoin for a cup of coffee is not allowed.

The country’s central bank said:

In Namibia, virtual currencies cannot be used as a means of payment and exchange for goods and services. For example, local shops cannot set prices based on virtual currencies, nor can they accept virtual currencies in exchange for goods and services. Therefore, virtual currency users should be extra careful when using such currencies, which cannot be compared to electronic money.