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Botswana

Retail_Trading_Status

Allowed-Regulated Unknown
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2025-06-26 12:54
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Executive Summary

In Botswana, retail trading of cryptocurrencies is legally permitted but regulated. The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) oversees the virtual asset sector, requiring Virtual Asset Service Providers (VASPs) to obtain licenses and comply with AML/KYC obligations. The Virtual Assets Act, 2022 (Act 4 of 2025), which came into effect on January 24, 2025, establishes a comprehensive regulatory framework to mitigate money laundering and terrorist financing risks. Prior to this act, the Bank of Botswana (BoB) had issued warnings about the risks associated with cryptocurrencies in the absence of a regulatory framework.

Key Pillars

The regulatory framework in Botswana is built upon several pillars. The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) serves as the primary regulator, responsible for licensing, supervising, and developing rules for the virtual asset sector. Core compliance requirements include Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) obligations, with emphasis on Know Your Customer (KYC) procedures, transaction monitoring, and suspicious activity reporting, as outlined in the Financial Intelligence Act, 2022 (as amended in 2025) and the Virtual Assets Act, 2025. VASPs are required to register with NBFIRA and adhere to AML/KYC obligations, with specific attention to the Travel Rule and reporting requirements for transactions exceeding BWP 10,000 or suspected of illicit activities.

Landmark Laws

Virtual Assets Bill (February 2022): Approved by lawmakers, aimed at regulating cryptocurrency trading and digital tokens. It mandates licensing for entities offering cryptocurrency services by NBFIRA to prevent money laundering and terrorism financing.
Virtual Assets Act, 2022 (Act 4 of 2025): Officially came into effect on January 24, 2025, via SI 9/2025. It regulates the sale and trade of virtual assets, licensing of VASPs and issuers of initial token offerings, and related matters.
Financial Intelligence Act, 2022 (as amended in 2025): Referenced in NBFIRA's Guidance Note (March 2025) for non-bank financial institutions conducting virtual assets business, outlining AML/CFT requirements.

Considerations

Crypto assets in Botswana are regulated as virtual assets. The Bank of Botswana supports the regulatory framework to mitigate potential future risks and address concerns about misconduct and illicit activities, such as money laundering. NBFIRA's Guidance Note of March 2025 specifies that if a virtual asset transfer exceeds BWP 10,000 or if there is a suspicion of money laundering or terrorist financing, VASPs must implement adequate risk-based measures. The central bank has highlighted the use of digital payment instruments that promote anonymity as a national security risk.

Notes

Prior to the Virtual Assets Act, the Bank of Botswana issued warnings regarding the risks of cryptocurrency trading, highlighting the absence of a legal or regulatory framework. The central bank acknowledges the currently minimal systemic risk posed by the underdeveloped local crypto market but emphasizes the importance of establishing a regulatory framework. NBFIRA's website and resources may require direct navigation to access specific documents. Sources indicate that the Virtual Assets Act (Act 4 of 2025) commenced on January 24, 2025, through SI 9/2025.

Detailed Explanation

In Botswana, individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies, although this activity is now subject to a specific regulatory framework. Historically, the Bank of Botswana (BoB) maintained a cautious stance, issuing warnings about the risks associated with cryptocurrencies. In a November 2021 press release, the BoB highlighted the lack of a legal or regulatory framework at the time and cautioned citizens engaging in cryptocurrency trading that they did so at their own risk. The Freeman Law website also noted the absence of regulations on cryptocurrencies in Botswana prior to the new legislation, referencing a 2018 study. However, this situation changed with the introduction of the Virtual Assets Act. In February 2022, Botswana's lawmakers unanimously approved the Virtual Assets Bill, aimed at regulating cryptocurrency trading and digital tokens. This bill mandated that any entity offering cryptocurrency services must obtain a license from the Non-Bank Financial Institutions Regulatory Authority (NBFIRA). The primary motivation behind this regulatory move was to establish provisions for managing, mitigating, and preventing money laundering and the financing of terrorism associated with virtual assets, as reported by FXEmpire and The Business Weekly & Review.

The Virtual Assets Act, 2022 (referred to as Act 4 of 2025 in one source), officially came into effect on January 24, 2025, via SI 9/2025, establishing a comprehensive regulatory framework. This Act regulates the sale and trade of virtual assets and the licensing of Virtual Asset Service Providers (VASPs) and issuers of initial token offerings, as confirmed by Blackhall's Laws of Botswana. NBFIRA is the designated authority responsible for licensing, supervising, and developing rules and guidelines for the virtual asset sector in Botswana. Juliana White, Director of Capital Markets at NBFIRA, stated that the objective of the Act and its supporting Regulations is to regulate new and developing virtual assets businesses and to address money laundering, terrorism financing, and proliferation risks. Smile ID also notes that Botswana's Virtual Asset Act regulates VASPs by requiring them to register with NBFIRA and comply with AML/KYC obligations.

Under this regulatory regime, VASPs are required to comply with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) obligations. NBFIRA issued a Guidance Note in March 2025 for non-bank financial institutions conducting virtual assets business, outlining requirements in line with the Financial Intelligence Act, 2022 (as amended in 2025) and the Virtual Assets Act, 2025. This guidance emphasizes Know Your Customer (KYC) procedures, transaction monitoring, suspicious activity reporting, and compliance with the Travel Rule. For instance, if a virtual asset transfer exceeds BWP 10,000 or if there's suspicion of money laundering or terrorist financing, VASPs must implement adequate risk-based measures.

The Bank of Botswana, while acknowledging the currently minimal systemic risk posed by the underdeveloped local crypto market, supports the establishment of a regulatory framework to mitigate potential future risks and address concerns about misconduct and illicit activities like money laundering, as highlighted by iGaming AFRIKA and Cointelegraph. The central bank has highlighted the use of digital payment instruments that promote anonymity as a national security risk. Therefore, while retail trading of cryptocurrencies is permitted, it operates within a regulated environment where VASPs are subject to licensing and stringent AML/KYC requirements enforced by NBFIRA. This marks a shift from the previous unregulated and cautionary stance to a formal, regulated approach.

Summary Points

Botswana: Retail Trading of Cryptocurrencies - Regulatory Overview (2025)

Overall Status: Allowed-Regulated

  • Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies.
  • This activity is subject to a specific regulatory framework.

1. Key Regulatory Bodies & Roles:

  • Bank of Botswana (BoB):
    • Historically issued warnings about cryptocurrency risks.
    • Currently supports the regulatory framework to mitigate future risks and address illicit activities.
    • Acknowledges minimal systemic risk due to the underdeveloped local crypto market.
  • Non-Bank Financial Institutions Regulatory Authority (NBFIRA):
    • Designated authority for licensing, supervising, and developing rules for the virtual asset sector.
    • Responsible for issuing licenses to Virtual Asset Service Providers (VASPs).
    • Enforces AML/KYC obligations.

2. Key Legislation & Regulations:

  • Virtual Assets Act, 2022 (Act 4 of 2025):
    • Commencement Date: January 24, 2025 (SI 9/2025).
    • Regulates the sale and trade of virtual assets.
    • Mandates licensing of VASPs and issuers of initial token offerings.
    • Aims to manage, mitigate, and prevent money laundering and terrorist financing.
  • Financial Intelligence Act, 2022 (as amended in 2025):
    • Works in conjunction with the Virtual Assets Act to combat financial crime.

3. Requirements for Compliance (VASPs):

  • Licensing: VASPs must obtain a license from NBFIRA to operate in Botswana.
  • AML/CFT Obligations: Compliance with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) regulations.
  • KYC Procedures: Implementation of Know Your Customer (KYC) procedures.
  • Transaction Monitoring: Monitoring transactions for suspicious activity.
  • Suspicious Activity Reporting: Reporting suspicious transactions to the authorities.
  • Travel Rule Compliance: Compliance with the Travel Rule for virtual asset transfers.
  • Risk-Based Measures: Implement adequate risk-based measures to mitigate and manage risks if a transfer exceeds BWP 10,000 or if there is a suspicion of money laundering or terrorist financing.
  • Market Abuse Prevention: License holders must have measures to identify, deter and prevent market abuse, financial crime and money laundering.

4. Notable Restrictions or Limitations:

  • While retail trading is permitted, it is subject to the regulatory framework established by the Virtual Assets Act and enforced by NBFIRA.
  • VASPs face stringent licensing and AML/KYC requirements.

5. Recent Developments or Changes:

  • February 2022: Approval of the Virtual Assets Bill.
  • January 24, 2025: Commencement of the Virtual Assets Act (Act 4 of 2025).
  • March 2025: NBFIRA issued a Guidance Note for non-bank financial institutions conducting virtual assets business.

Full Analysis Report

Report on Retail_Trading_Status in Botswana

Date of Report: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

Retail_Trading_Status: Allowed-Regulated

1. Most Accurate Current Status: Allowed-Regulated

2. Detailed Narrative Explanation:

Individual citizens and residents in Botswana are legally permitted to buy, sell, and hold cryptocurrencies. However, this activity is now subject to a specific regulatory framework. Historically, the Bank of Botswana (BoB) maintained a cautious stance, issuing warnings about the risks associated with cryptocurrencies and clarifying that they were not legal tender and not regulated by the central bank. For instance, a November 2021 press release from the BoB highlighted the lack of a legal or regulatory framework at the time and cautioned citizens engaging in cryptocurrency trading that they did so at their own risk.

This landscape began to formally change with the introduction of the Virtual Assets Act. In February 2022, Botswana's lawmakers unanimously approved the "Virtual Assets Bill" aimed at regulating cryptocurrency trading and digital tokens. This bill mandated that any entity offering cryptocurrency services must obtain a license from the Non-Bank Financial Institutions Regulatory Authority (NBFIRA). The primary motivation behind this regulatory move was to establish provisions for managing, mitigating, and preventing money laundering and the financing of terrorism associated with virtual assets.

The Virtual Assets Act, 2022, (referred to as Act 4 of 2025 in one source, with a commencement date of January 24, 2025, via SI 9/2025) officially came into effect, establishing a comprehensive regulatory framework. This Act regulates the sale and trade of virtual assets and the licensing of Virtual Asset Service Providers (VASPs) and issuers of initial token offerings. NBFIRA is the designated authority responsible for licensing, supervising, and developing rules and guidelines for the virtual asset sector in Botswana.

Under this regulatory regime, VASPs are required to comply with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) obligations. NBFIRA issued a Guidance Note in March 2025 for non-bank financial institutions conducting virtual assets business, outlining requirements in line with the Financial Intelligence Act, 2022 (as amended in 2025) and the Virtual Assets Act, 2025. This guidance emphasizes Know Your Customer (KYC) procedures, transaction monitoring, suspicious activity reporting, and compliance with the Travel Rule. For instance, if a virtual asset transfer exceeds BWP 10,000 or if there's suspicion of money laundering or terrorist financing, VASPs must implement adequate risk-based measures.

The Bank of Botswana, while still acknowledging the currently minimal systemic risk posed by the underdeveloped local crypto market, supports the establishment of a regulatory framework to mitigate potential future risks and address concerns about misconduct and illicit activities like money laundering. The central bank has highlighted the use of digital payment instruments that promote anonymity as a national security risk.

Therefore, while retail trading of cryptocurrencies is permitted, it operates within a regulated environment where VASPs are subject to licensing and stringent AML/KYC requirements enforced by NBFIRA. This marks a shift from the previous unregulated and cautionary stance to a formal, regulated approach.

3. Specific, Relevant Text Excerpts:

  • Freeman Law (undated, referencing a 2018 study and statements): "Currently, there are no regulations on cryptocurrencies or the use of blockchain technology in Botswana." (This quote reflects the historical status before the new Act).
  • FXEmpire (February 2022): "Another African country joined the crypto regulation's bandwagon, and this time is Botswana, which passed a bill to regulate digital assets trading. According to Bloomberg, cryptos and digital tokens will be regulated as part of their efforts to bolster their policies on anti-money laundering (AML)."
  • FXEmpire (February 2022): "The new rules seek that any company that offers cryptocurrencies services or anything related to digital tokens should obtain a license from the Non-Bank Financial Institutions Regulatory Authority."
  • Crypto Asset Buyer (February 2022): "The Virtual Asset Bill may introduce a crypto licensing regime in Botswana... for only players deemed eligible by the supervisory body. Botswana’s Non-Bank Financial Institutions Regulatory Authority (NBFIRA) will be the supervisory body responsible for issuing licenses to virtual asset service providers (VASPs) who wish to operate in the country."
  • The Business Weekly & Review (August 2022): "Juliana White, Director of Capital Markets at the Non-Bank Financial Institutions Regulatory Authority NBFIRA), says the objective of the Act and its supporting Regulations is to regulate new and developing virtual assets businesses. The law makes provisions for managing, mitigating and preventing money laundering and financing of terrorism and proliferation risks associated with virtual assets and new emerging business practices and technologies, as well as for NBFIRA's functions and powers."
  • The Business Weekly & Review (August 2022): "The Act requires a license holder to have appropriate measures to identify, deter and prevent market abuse, financial crime and money laundering on and through its distributed ledger technology platform and report to the Regulatory Authority any market abuse or suspicious transaction."
  • Blackhall's Laws of Botswana (referencing Act 4 of 2025): "An Act to regulate the sale and trade of virtual assets, licensing of virtual asset service providers and issuers of initial token offerings, and to provide for matters connected, incidental and related thereto. Date of Commencement: 24th January, 2025 [through SI 9/2025]."
  • Smile ID (October 2024, updated): "Botswana's Virtual Asset Act regulates virtual asset service providers (VASPs) by requiring them to register with the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) and comply with AML/KYC obligations."
  • NBFIRA (March 2025): "This Guidance Note is authored by the NBFIRA in line with section 49(1)(c) of the Financial. Intelligence Act, 2022 as amended in 2025 and Regulations, 2022 (“FI Legislation”), and section 4(1)(c) of Virtual Assets Act, 2025 of the Republic of Botswana for comprehensive use by the NBFIs."
  • NBFIRA (March 2025): "(b) Risk-Based Measures: If a transfer exceeds BWP 10,000 or if there is a suspicion of money laundering or terrorist financing, implement adequate risk- based measures to mitigate and manage these risks."
  • iGaming AFRIKA (January 2025): "While the central bank deems the current impact of cryptocurrencies on financial stability as minimal—considering the underdeveloped nature of Botswana's virtual asset markets—it underscores the importance of establishing a regulatory framework to mitigate potential future risks."
  • Cointelegraph (December 2024): "Domestically, risks emanating from crypto assets are minimal but ongoing misconduct in the segment presents regulatory concerns. Regulators therefore need to develop effective oversight frameworks for the sector.”

4. Direct, Accessible URL Links to Specific Sources:

Web Sources (11)

Sources discovered via web search grounding

Search queries used (5)
  • Botswana cryptocurrency regulation status 2025
  • Bank of Botswana cryptocurrency policy 2025
  • NBFIRA Botswana cryptocurrency guidelines 2025
  • Botswana retail crypto trading laws and AML/KYC requirements 2025
  • Is cryptocurrency trading legal in Botswana for individuals 2025
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