Botswana

**Report: Retail Cryptocurrency Trading Status in Botswana**

**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).

**1. Current Status:** `Allowed-Regulated`

**2. Detailed Narrative Explanation:**

Retail cryptocurrency trading by individual citizens and residents in Botswana is legally permitted but operates within a specific regulatory framework established in 2022. While individuals are free to buy, sell, and hold cryptocurrencies, the *provision* of virtual asset services is now a regulated activity requiring licensure.

Historically, Botswana's authorities, particularly the Bank of Botswana (BoB), maintained a cautious stance. They repeatedly stated that cryptocurrencies were not legal tender and warned citizens about the inherent risks, including volatility, lack of investor protection, and potential for illicit use like scams and money laundering. Prior to 2022, there was no specific legal framework addressing cryptocurrencies, meaning trading occurred in an unregulated space at the individual's own risk.

This changed significantly with the enactment of the **Virtual Assets Act, 2022**, which commenced on February 25, 2022. This Act does not ban individuals from owning or trading crypto. Instead, it focuses on regulating **Virtual Asset Service Providers (VASPs)** – entities that conduct virtual asset business on behalf of others (e.g., exchanges facilitating buying/selling, custody providers).

Key aspects of the current regulatory environment include:

*   **Legality for Individuals:** Owning and trading cryptocurrencies is not illegal for individuals in Botswana.
*   **VASP Licensing:** Any entity (person or company) providing virtual asset services *in* or *to* Botswana must obtain a license from the Non-Bank Financial Institutions Regulatory Authority (NBFIRA). This includes exchanges, initial token issuers, and potentially other intermediaries. Operating as an unlicensed VASP is illegal.
*   **Regulatory Authority:** NBFIRA is responsible for licensing, supervising, and regulating VASPs and Initial Token Offerings (ITOs).
*   **AML/CFT Focus:** A primary driver for the Virtual Assets Act was to align Botswana with international standards, particularly Financial Action Task Force (FATF) recommendations, concerning Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) risks associated with virtual assets. Licensed VASPs are subject to these requirements.
*   **Consumer Protection:** While the Act aims to bring legitimacy and oversight, the BoB and NBFIRA continue to emphasize the risks involved. NBFIRA notes that licensing provides accountability, and customers of licensed entities have recourse if issues cannot be resolved directly with the provider. However, cryptocurrencies themselves remain volatile and are not guaranteed by any state authority.
*   **No Legal Tender Status:** Cryptocurrencies are still not considered legal tender in Botswana.
*   **Ongoing Monitoring:** Both the BoB and NBFIRA continue to monitor the evolving crypto landscape, acknowledging potential future risks to financial stability as the sector grows and integrates further with the traditional financial system.

Therefore, while individuals can trade, they should ideally do so through VASPs licensed by NBFIRA to benefit from the regulatory oversight and protections established under the Virtual Assets Act, 2022. Engaging with unlicensed platforms carries significant legal and financial risks.

**3. Specific, Relevant Text Excerpts:**

*   **On the legality and regulatory shift (pre-Act context):**
    *   "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 decentralized technologies, also known as crypto currency, is akin to investment in any other intangible assets with attendant risks..." (Bank of Botswana statement, cited by Southern African Times)
    *   "No, cryptocurrency or the use of blockchain technology is not regulated in Botswana, but currently it is not illegal to trade it." (Guardian Sun, Nov 2021)

*   **On the introduction of regulation (Virtual Assets Act, 2022):**
    *   "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." (Preamble, Virtual Assets Act, 2022)
    *   "A new bill is set to be placed before next week's emergency sitting of Parliament