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Namibian Central Bank Bans Bitcoin For Commercial Use

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Namibia Central Bank Bans Bitcoin

Following the warning by the Central Bank of Namibia to its citizens to invest in bitcoin at their own risk and a promise to release an opinion paper on the adoption of bitcoin, Namibia has now officially banned the use of bitcoin or any other cryptocurrency in the country.

The Bank of Namibia stated that the virtual currency exchanges are not acceptable in Namibia and traders should not accept them as payments for goods or services offered based on a decades-old law.

The new nine-page position paper released this month by the Bank of Namibia, “aims to educate the Namibian public and state the Bank of Namibia’s understanding and position concerning distributed ledger technologies and digital currencies, with a specific focus on virtual currencies.”

The paper stated that bitcoins and other virtual currencies pose a ‘minimal’ threat to the Bank’s monetary policy since they currently have a limited presence in the financial system in Namibia.

To further emphasize its stand, the central bank made clear references to the use of digital currencies that lack a centralised system of backing by the government or any other institution and the potential risk that they pose to users. Besides money laundering, the Bank of Namibia also cites credit, liquidity, legal, and operational risk as threats to its citizens, similar to those stated by the European Central Bank.

Namibia’s Legal Framework

The paper is heavily reliant on previous research by the Financial Action Task Force (FATF), a global organization founded by the G7 to curb money laundering and the International Monetary Fund (IMF). Besides the two, the Bank also refers to its own domestic law citing relevant Constitutional Acts.

For instance, the country’s Exchange Control Act of 1966, “does not make provision for the establishment of virtual currency exchanges or bureaus in Namibia,” said the Central Bank of Namibia.

The paper further stated:

“A virtual currency exchange or bureau can be referred to as an entity that converts or exchanges legal tender currency / fiat currency into virtual currency or vice versa. In addition to the bank not recognising virtual currencies as legal tender in Namibia, it also does not recognise it to be a foreign currency that can be exchanged for local currency. This is because virtual currencies are neither issued nor guaranteed by a central bank nor backed by any commodity.”

Acknowledgement of Blockchain Technology

While the report maintains its stand on the use of bitcoin and other virtual currencies making use of the blockchain technology, the paper also notes the potential that such ledgers have in offering low-cost payment methods that are efficient.

Still, the central bank cannot accept the use of any virtual currency and states that “due to the lack of a legal premise, the bank is unable to endorse such activities in Namibia at the moment.”

As it stands, Namibians are not allowed to buy a cup of coffee using bitcoin, as trivial as it seems.

“Virtual currencies cannot be used to pay for goods and services in Namibia,” the central bank affirmed. “For example, a local shop is not allowed to price or accept virtual currencies in exchange for goods and services. Users of virtual currencies should therefore exercise caution when dealing in this type of currencies or when comparing it to e-money.”

Stating that there may be a need to conduct further studies on the use of distributed ledger technologies and how they can be utilised to improve the financial sector’s proficiency, the bank said, “the current position of the Bank may be amended and/or supplemented, should a need arise.”

This announcement by the Namibian Central Bank is a blow to cryptocurrency innovation in the Southern African nation. However, given the decentralised and pseudo-anonymous nature of bitcoin, it is unlikely that Namibians will stop buying bitcoin as an investment or use it privately to send and receive cross-border remittances.

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Almost a Quarter of High-Tech Consumers in South Africa Now Own Cryptocurrency

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High-Tech Consumers in South Africa

A new study titled “Digital Lifestyle Measure report” conducted by MBIT found that 23 percent of high-tech consumers in South Africa own at least one cryptocurrency, with bitcoin being the most common holding. 

New Report Shows High-Tech Consumers Hold Crypto

In the”Digital Lifestyle Measure report” report, each level of tech consumer (high, medium, and low) was grouped according to DM segmentation. A high-tech consumer is identified and tagged as a “DLM5 consumer”, and for the low-tech consumers, a “DLM1 consumer” was used. 

To place each of the participants in the right groups, the survey made use of a question and answer (Q&A) method. Each person was categorised according to how well they were able to answer the provided questions. The questions mostly focused on their private digital lifestyle and technological gadgets they own and can operate well.

The result of this survey shows that only six percent of the low-tech consumers (DLM 1) own crypto, while 23 percent of high tech consumers own cryptocurrencies. The remaining percentage was then shared in the order: DLM 2: seven percent, DLM 3: twelve percent, and DLM 4: eight percent.

cryptoThe report also stated that of the DML5 population, about 42 perfect of them are of the notion that cryptocurrencies are here to stay. Same goes for 30 percent of the DLM 4 consumers group.

Conversely, 41 percent of the low-tech consumers (DLM1 consumers) did not know what cryptocurrencies are all about, according to IOL

From the DLM 3 consumer group, about 34 percent of them cannot say what the future looks like for cryptocurrencies but 26 percent of them claimed cryptocurrencies to be the “future of financial transacting.”

The report has further shown that high tech consumers who are continually paying for something electronically, are more likely to buy crypto in the long run.

Based on the google trends data, South Africa currently has the highest levels of interest in bitcoin across the world. Hence, it should come as no surprise that tech-savvy South Africans are the ones investing in digital currencies and tokens. 

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Ecobank Report: Most African Regulators Are Taking a “Wait and See” Approach to Cryptocurrency Regulation

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African Regulators

While there has been a substantial increase in the adoption of cryptocurrencies in Africa compared to three years ago, there has been minimal effort from African countries to try and regulate cryptocurrencies despite their increased use in various African nations according to a new report by Ecobank.

Ecobank tracked “the current state of cryptocurrency regulation in all markets in Sub-Saharan Africa” through the regulatory responses that have been issued by central banks or financial regulators. In the report, the pan-African bank found that most African regulators are taking a “wait and see” approach when it comes to cryptocurrency regulation.

The report stated: “Many African governments and regulators recognise both the risks and the potential positive impacts of cryptocurrencies, and some also appreciate the difference between cryptocurrencies and the underlying blockchain technology. But they have been reticent in authorising cryptocurrency transactions, and mostly remain apprehensive about the potential risks. African countries appear to be looking to their neighbours to regulate and innovate first, and learn from their mistakes, rather than being the first mover.”

The reported noted that the main reason why African governments were being skeptical about licensing the use of cryptocurrencies was their citizens getting overexposed to cryptocurrency investments and there being a future crash that would cause a ripple effect in the broader economy.

African Regulators’ Stance

African RegulatorsOut of the 39 jurisdictions surveyed, more than 21 countries in the region are yet to make a public declaration on the use of cryptocurrencies.

So far, there have been three countries that have taken a stance on cryptocurrency. Namibia tops the list having banned the commercial use of digital currencies. However, South Africa and Swaziland are the only two countries in Sub-Saharan Africa that have adopted “a generally favourable and permissive stance, but without full legality”.

The remaining countries fall somewhere in between and “refuse” to directly regulate cryptocurrencies claiming that bitcoin and other digital currencies “operate in the grey area between legality and illegality” and have issued warnings to their citizens and investors against using or investing in them. The bank also noted that conversations regarding the speculative nature and instability of cryptocurrency prices have overshadowed their benefits and the potential they bring.

The bank went ahead to note: “Unfortunately, the spectacular rise and fall in the traded value of cryptocurrencies has drowned out broader discussion on the potential benefits this new technology could bring. The transformational impact that could be delivered by tokenising products and services on the blockchain has been compared to that of the Internet. Crypto tokens and currencies could enable consumers to transact instantly, cross-border and for free, provide them with KYC-compliant digital IDs, and incentivise their behaviour and change the way they engage with governments & service providers.”

Ecobank will continue to track cryptocurrency regulation in Sub-Saharan Africa and provide regular updates that will reflect the regulation progress in the African nations.

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Paxful Continues #BuiltWithBitcoin Charitable Initiative in Africa with the Construction of a Second School

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#BuiltWithBitcoin

Peer-to-peer bitcoin exchange Paxful announced the newest chapter in its #BuiltWithBitcoin charitable initiative: the construction of a school in Rwanda – for students aged six to fifteen – in the Nyamata Sector of Rwanda’s Bugesera District. This will be the second bitcoin-funded school that Paxful has raised funds for.

bitcoinContinuing its partnership with NGO Zam Zam Water, Paxful has kickstarted the project with a $20,000 donation. The total construction cost of the school is estimated to be $100,000. The remaining balance, Paxful hopes, will be raised through its fundraising campaign.

Donations can be made via Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Dash.  Paxful will match all community donations until the $100,000 goal is met.

“The #BuiltWithBitcoin initiative is a testament to the power of cryptocurrency,” said Ray Youssef, CEO of Paxful. He added:

“We firmly believe that it can improve lives and make the world a better place.”

The planned school is expected to be almost twice the size of the first bitcoin-funded school and will serve up to 300 primary school students upon completion. Furthermore, the school will include a cafeteria, a 35,000-liter potable water well, solar panels for sustainability, and many other resources for the education and enjoyment of students, staff, and faculty, according to a company press release.

“Education is a crucial tool for helping those in developing nations increase their standard of living, so we are very pleased to partner with Paxful to serve these bright young students,” said Yusuf A. Nessary, founder and president of Zam Zam Water. He added:

“This is only a small glimpse into what we can and will continue to do with the power of cryptocurrency.”

Paxful began the #BuiltwithBitcoin initiative in 2017 to promote philanthropy and charity within the cryptocurrency industry. The company plans to construct 100 African schools, as well as donate money for wells and other projects.

To contribute to #BuiltwithBitcoin, send all donations to Zam Zam Water:

BTC (Bitcoin): 3Q5CESP85hhXTLSy2HDbSyNchb5Bi8D7ku
BCH (Bitcoin Cash): 15YGniLxo77kfMUWGoRNT6ShUQC93MvaXg

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