The Parliament of Bostwana on Tuesday unanimously passed crypto legislation under The Virtual Asset Bill which will regulate cryptocurrencies and digital assets as reported by Bloomberg. According to Botswana’s Minister for Finance, Peggy Serame, the Virtual Asset Bill is there as an anti-money laundering (AML) measure with opposition lawmakers saying that if left unregulated the crypto industry could cause a “Wild West” scenario for the financial sector.
Botswana’s push for a crypto bill comes after it was removed from the Financial Action Task Force’s (FAFT) list for countries that need more monitoring in relation to money laundering and terrorist financing. A little sidenote, Zimbabwe is, as I am sure you have already guessed, on the list with the organisation stating that:
At its October 2021 plenary, the FATF has made the initial determination that Zimbabwe has substantially completed its action plan and warrants an on-site assessment to verify that the implementation of Zimbabwe’s AML/CFT reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation in the future.
FAFT
Anyway, Botswana’s Virtual Asset Bill requires any company that offers crypto-related services (which includes digital tokens) to obtain a licence from the Non-Bank Financial Institutions Regulatory Authority (NBFIRA). This is because a couple of months back the Central Bank of Bostwana released a statement expounding on the risks involved with crypto trading and so-called investments:
There is no specific legal or regulatory framework pertaining to, or proscribing investment, in crypto assets, such as bitcoin in Botswana. Therefore, trading in bitcoin or similar decentralised technologies, also known as “cryptocurrency”, is akin to investment in any other intangible assets with attendant risks, inherent in such investments, such as complete loss of value or possible abuse of the technologies to the detriment of investors. These activities put the investor’s funds at risk, premised on the trust and full knowledge of the nature and scale of the risks associated with these forms or types of businesses;
Bank of Botswana
So unlike what we are seeing locally, Botswana is keenly aware of the risks that come with crypto and moved quicker than most to implement legislation. This avoids what we saw in our teapot shaped country when scammers made off with US$6 million in the Cryptoshare investment scheme.
The crypto bill passed by Botswana will at the very least give the country a way to register and scrutinise entities that want to operate in the country. All it needs now is the President’s signature and it will become law.
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UK-based financial services lawyer, Prosper Mwedzi drafted a private Crypto Bill for Zimbabwe which outlines the responsibilities of the authorities and companies that want to operate in the space locally. We had a Twitter Spaces with him last year to go over the bill as well as the paper he co-authored with The Zimbabwe Blockchain Think Tank.
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