The Regulatory Authority under Namibia’s Virtual Assets Act 10 of 2023

The Republic of Namibia has embraced the transformative potential of virtual assets, recognizing the need for a robust regulatory framework to govern this dynamic and evolving sector.

At the heart of this regulatory framework is the designation of a Regulatory Authority, a key entity tasked with overseeing and shaping the virtual asset landscape in accordance with the Virtual Assets Act 10 of 2023.

Designation of Regulatory Authority:

The authority vested in the Regulatory Authority is initiated through a formal process outlined in Section 5 of the Virtual Assets Act. According to this provision:

Designation Process:

The Minister, through an official notice in the Gazette, holds the authority to designate one or more entities as the Regulatory Authority. This critical step empowers the chosen entity/entities to exercise the powers and perform the functions stipulated by the Act or any other relevant law.

Amendment or Cancellation:

While the Minister has the prerogative to amend or cancel a designation, the process is not arbitrary. Before such action is taken, the Minister is obligated to inform the Regulatory Authority in writing about the intention to amend or cancel the designation. Importantly, the Regulatory Authority is granted the opportunity to present its case, ensuring a fair and transparent decision-making process.

Public Notice:

To enhance transparency and keep stakeholders informed, the Minister is required to publish a notice in the Gazette, revealing the name of the designated entity/entities as the Regulatory Authority. Additionally, any amendments or cancellations to the designation are also communicated through the Gazette.

Powers and Functions of Regulatory Authority:

The Regulatory Authority, once designated, assumes a pivotal role in steering the virtual asset ecosystem. Section 6 of the Virtual Assets Act outlines a comprehensive set of powers and functions vested in the Regulatory Authority, including:

Licensing of Virtual Asset Service Providers:

The Regulatory Authority is empowered to issue licenses to virtual asset service providers, ensuring that entities operating in this space meet defined standards and adhere to regulatory requirements.

Regulation, Supervision, and Monitoring:

To maintain the integrity and security of the virtual asset ecosystem, the Regulatory Authority is tasked with regulating, supervising, and monitoring activities related to the provision of virtual asset services.

Inspection and Investigation:

The authority can appoint inspectors for the purpose of conducting inspections and investigations as necessitated by the provisions of the Act.

Rule-Making:

The Regulatory Authority has the authority to establish rules that provide clarity and guidance on various aspects of virtual asset operations, contributing to a stable regulatory environment.

Directives and Enforcement:

Issuing directives and taking enforcement actions against license holders and other individuals involved in virtual asset services fall within the purview of the Regulatory Authority.

Publication of Guidelines:

To promote understanding and adherence to the Act, the Regulatory Authority is tasked with publishing guidelines on the interpretation, application, and enforcement of the legislation.

Collaboration and Information Sharing:

Facilitating collaboration with supervisory authorities, competent bodies, investigating authorities, and comparable entities is a crucial function. The Regulatory Authority promotes the sharing and exchange of relevant information to enhance regulatory effectiveness.

Investor Education and Innovation Facilitation:

In line with fostering a healthy virtual asset ecosystem, the Regulatory Authority is entrusted with the responsibility of promoting investor education and creating conditions that facilitate innovation and development in the virtual asset space.

Fee Determination:

Determining the fees payable in accordance with the Act is within the Regulatory Authority’s purview, ensuring that the costs associated with compliance are transparent and justifiable.

Advisory Role:

The Regulatory Authority plays a crucial advisory role by providing the Minister with insights and recommendations on all matters related to virtual assets. This ensures that regulatory decisions are well-informed and aligned with industry dynamics.

Broad Authority:

Ultimately, the Regulatory Authority is empowered to exercise powers and perform functions not only under the Virtual Assets Act but also under any other law deemed relevant to its regulatory mandate.

In conclusion, the designation and functions of the Regulatory Authority under Namibia’s Virtual Assets Act 10 of 2023 underscore the nation’s commitment to fostering a secure, transparent, and innovative virtual asset ecosystem. As the virtual assets landscape continues to evolve, the Regulatory Authority’s role will be pivotal in maintaining the delicate balance between innovation and regulatory oversight.