Botswana’s administration plans to introduce a “Virtual Asset Bill” to the country’s parliament, which may make it one of the first African countries to pass legislation governing cryptocurrencies.
According to a recent official gazette, a Botswana government draft bill that seeks to control new and emerging virtual asset enterprises and offer a regulatory body with its tasks and powers is slated to be presented to its parliament.
Press release by Bank of Botswana (November 10, 2021)
An earlier press release by the Bank of Botswana stated the participation and regulation of crypto assets. The Bank indicated that they have been watching and monitoring trends in the growing trade of crypto assets, particularly Bitcoin, both internationally and locally, including involvement by residents and other domestic entities in regional and global trading platforms. Moreover, the Bank admits receiving and responding to public and media inquiries on the issue, including legality in Botswana, authorities’ approval, and the presence of any regulatory framework for the licensing, regulation, and protection of “investors/consumers.”
The Bank also observed no specific legal or regulatory framework on or proscribing investment in cryptocurrencies like bitcoin in Botswana. In context, trading in bitcoin or other decentralized technologies, commonly known as “cryptocurrency,” is analogous to investing in any other intangible asset, with risks such as total loss of value or possible exploitation of the technology to the harm of investors. These operations put the investor’s money at risk, and they rely on the investor’s confidence and thorough understanding of the nature and scope of the risks connected with these sorts of firms.
The idea of presenting the Virtual Asset Bill with other proposals such as the Financial Intelligence Bill came barely over two months after Botswana’s central Bank cautioned people engaging in cryptocurrency trading that the country lacked a regulatory framework to control such trade.
Nonetheless, according to the draft published in the Extraordinary Government Gazette on December 23, Botswana authorities intend to include “provisions for managing, mitigating, and preventing money laundering and financing of terrorism” in the proposed law. The document also aims to restrict the growth of virtual assets as well as new developing business practices and technology.
In the meantime, some cryptocurrency enthusiasts believe Botswana’s intention to change its financial regulations is tied to its removal from the Financial Action Task Force’s (FATF) graylist in October 2021. The FATF has previously flagged the nation due to shortcomings in its anti-money laundering (AML) and counter-terrorist financing (CTF) regimes.