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Monday, Jul 23rd

Namibia wary of Bitcoin but acknowledges Blockchain

Namibia weary of Bitcoin but acknowledges Blockchain

The Bank of Namibia does not consider cryptocurrencies like Bitcoin as legal tender – although it recognises the underlying Blockchain technology as innovative.

This is according to a position paper released by the Bank, introduced as Blockchain continues to gain traction across the Nigeria and South Africa markets.

Namibia's apex bank distinguishes virtual currencies like Bitcoin from electronic money which is a digital representation of legal tender currency. It does not consider the creation of virtual currencies similar to the function entrusted to it and deems their current impact on its role as the sole custodian of money creation and supply in Namibia as minimal.

"Virtual currencies are not legal tender and are considered unsafe to users that are unaware of the risks it possesses. The Bank does not consider virtual currencies to be the equivalent to the Namibian currency despite there being similarities from the functions of money and measure of value perspective," it states adding that trading of virtual currencies in Namibia is not currently regulated and individuals that engage in such trading would be doing so at their own risk and should exercise caution.

It based its argument on the view that virtual currencies that can be exchanged for government-issued money as potentially vulnerable to money laundering and terrorist financing abuse for various reasons and does not consider them to be payment instruments though they can be used in the provision and the facilitation of payment transactions.

In South Africa, established retailer Pick 'n Pay has initiated a pilot phase to accept Bitcoin as a method of payment in its stores.

The Deputy Director, Payments System Policy and Oversight at the Central Bank of Nigeria, Musa Jimoh, reportedly disclosed at a recent cryptocurrency-related conference in Nigeria that they are already making arrangements to embrace cryptocurrencies in the country.

Thabang Mashiloane, co-founder of Chankura exchange, which recently launched Ethereum trading in emerging markets through its platform that operates in South Africa, Kenya, Ghana and United States, believes Africa needs a different kind of financial engineering and not replicated.

Mashiloane says Blockchain technology offers a fair and transparent financial technology system that can prevent corruption and facilitate a new monetary system that works for Africa, adding that Bitcoin and Blockchain are here to stay and governments should create regulatory frameworks that will ensure economic advantage and help Africa catch up with global counterparts.

"I think saying 'we are not going to be doing anything about this technology' might not be the most progressive status. Russia is already working close with the Ethereum team, Dubai is working with Consensys to develop Blockchain systems that will reduce supply chain costs. African countries should be thinking about leapfrogging certain technologies that they did not afford the opportunity to have with the Blockchain. I bet Zimbabwean citizens will be better off with Bitcoin than their current currency because they will be financially included globally."

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