Botswana
Retail_Trading_Status
- Analysis ID
- #614
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- 2025-12-12 03:55
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- b8bb79b5...
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Executive Summary
Retail cryptocurrency trading is explicitly legal and regulated in Botswana following the enactment of the Virtual Assets Act in February 2022. The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) serves as the primary regulator and has actively issued licenses to Virtual Asset Service Providers (VASPs), with Yellow Card becoming the first licensee in late 2022. While the Bank of Botswana (central bank) remains cautious regarding financial stability risks, it acknowledges the legal framework, and retail investors can legally buy, sell, and hold digital assets through licensed entities.
Key Pillars
Non-Bank Financial Institutions Regulatory Authority (NBFIRA) - Primary regulator for VASPs
Financial Intelligence Agency (FIA) - Oversight for AML/CFT compliance
Bank of Botswana (BoB) - Monitors financial stability risks but does not directly license VASPs
Virtual Asset Service Provider (VASP) Licensing - Mandatory for all entities offering crypto services to residents
Landmark Laws
Virtual Assets Act, 2022 (Act No. 3 of 2022) - Enacted: 2022-02-25
- The foundational law regulating the sale and trade of virtual assets and licensing of VASPs. It prohibits unlicensed virtual asset businesses and establishes NBFIRA as the regulatory authority.
- Source
Virtual Assets Regulations, 2022 (S.I. No. 18 of 2022) - Enacted: 2022-02-25
- Subsidiary legislation detailing the application process, license fees, and operational requirements for VASPs.
Bank of Botswana Public Notice on Crypto Assets (Press Release) - Enacted: 2021-11-10
- A warning issued prior to the Act, clarifying that crypto is not legal tender and investors trade at their own risk. While the Act now legalizes VASPs, the Central Bank maintains a stance that crypto is not guaranteed by the state.
- Source
Considerations
Licensing Requirement: Operating a crypto exchange without an NBFIRA license is a criminal offense punishable by fines or imprisonment.
Taxation: Cryptocurrency gains are subject to Capital Gains Tax (CGT). Professional traders may be liable for Income Tax on business profits.
Banking Access: While no banking ban exists, banks are risk-averse; however, licensed entities (like Yellow Card) successfully offer local bank transfer and mobile money (e.g., MyZaka) integration.
Legal Tender: Cryptocurrencies are not legal tender in Botswana; they are classified as 'virtual assets' used for investment or payment by mutual agreement.
Notes
Botswana's removal from the FATF grey list was partly attributed to the swift enactment of the Virtual Assets Act, which closed gaps in AML/CFT oversight. This creates a strong incentive for the government to maintain strict regulatory enforcement.
Remaining Uncertainties
- Specific VAT treatment on crypto transaction fees (as opposed to the asset value itself) remains less clearly defined in public circulars.
- The extent of enforcement against international, unlicensed exchanges serving Botswana residents remotely is not fully documented in public enforcement reports.
Detailed Explanation
Detailed Explanation
Cryptocurrency retail trading is explicitly legal and regulated in Botswana following the enactment of the Virtual Assets Act on February 25, 2022. This foundational legislation provides a comprehensive framework for the sector, establishing the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) as the primary regulatory body. The Act prohibits unlicensed virtual asset businesses, making it mandatory for any entity offering crypto services to residents to obtain a Virtual Asset Service Provider (VASP) license from NBFIRA. Operating without such a license is a criminal offense punishable by fines or imprisonment. The regulatory framework was further detailed through the subsidiary Virtual Assets Regulations, also enacted on February 25, 2022, which specify application processes, license fees, and operational requirements for VASPs. The Financial Intelligence Agency (FIA) oversees Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) compliance, a critical component of the regime that contributed to Botswana's removal from the Financial Action Task Force's grey list. The Bank of Botswana (BoB), the nation's central bank, does not directly license VASPs but monitors financial stability risks associated with the sector. Prior to the legalization, on November 10, 2021, the central bank issued a public notice clarifying that crypto assets are not legal tender and that investors trade at their own risk, a stance it maintains despite the new legal framework. The first operational license under this regime was granted to Yellow Card in late 2022, demonstrating active regulatory enforcement. The legal status does not imply state backing for cryptocurrencies; they are classified as 'virtual assets' for investment or payment by mutual agreement only. In terms of practical access, while there is no formal banking ban, traditional financial institutions remain risk-averse. However, licensed VASPs have successfully integrated local bank transfers and mobile money services like MyZaka for their customers. From a tax perspective, cryptocurrency gains are subject to Capital Gains Tax, while professional traders may be liable for Income Tax on business profits.
Summary Points
Botswana Cryptocurrency Regulatory Summary
I. Regulatory Status
* Retail cryptocurrency trading is explicitly legal and regulated.
* Status is Allowed-Regulated, with a comprehensive licensing framework for service providers.
* A regulated market has been operational since late 2022 with the first license issuance.
II. Key Regulatory Bodies
* Non-Bank Financial Institutions Regulatory Authority (NBFIRA): The primary regulator responsible for licensing and supervising Virtual Asset Service Providers (VASPs).
* Financial Intelligence Agency (FIA): Holds oversight for AML/CFT compliance within the virtual assets sector.
* Bank of Botswana (BoB): The central bank monitors financial stability risks but does not directly license VASPs. It maintains a cautious public stance.
III. Important Legislation
* Virtual Assets Act, 2022 (Act No. 3 of 2022): The foundational law enacted on 2022-02-25. It regulates the sale and trade of virtual assets, prohibits unlicensed VASP operations, and establishes NBFIRA as the regulator.
* Virtual Assets Regulations, 2022 (S.I. No. 18 of 2022): Subsidiary legislation enacted on 2022-02-25, detailing VASP application processes, license fees, and operational requirements.
* Bank of Botswana Public Notice on Crypto Assets (2021-11-10): A pre-Act warning clarifying crypto is not legal tender and investors trade at their own risk. The stance on no state guarantee remains relevant post-regulation.
IV. Compliance Requirements
* VASP Licensing: Mandatory for all entities offering crypto services to residents. Operating without an NBFIRA license is a criminal offense punishable by fines or imprisonment.
* AML/CFT: VASPs must comply with AML/CFT regulations under the oversight of the FIA.
* Taxation: Cryptocurrency gains are subject to Capital Gains Tax (CGT). Income Tax may apply to profits from professional trading activities.
V. Notable Restrictions or Limitations
* Legal Tender Status: Cryptocurrencies are not legal tender in Botswana; they are classified as 'virtual assets' for investment or payment by mutual agreement only.
* Banking Access: While no formal ban exists, traditional banks are risk-averse. Licensed VASPs have, however, successfully integrated local banking channels and mobile money.
VI. Recent Developments or Notes
* The swift enactment of the Virtual Assets Act was a key factor in Botswana's removal from the FATF grey list, creating a strong government incentive for strict enforcement.
* Yellow Card became the first licensed VASP in late 2022, demonstrating the framework's operational reality.
Full Analysis Report
Full Analysis Report
Botswana has established itself as one of the few African jurisdictions with a comprehensive and active regulatory framework for cryptocurrencies. The turning point was the enactment of the Virtual Assets Act, 2022, which came into effect on February 25, 2022. This legislation moved the country from a 'buyer beware' environment to a formal 'Allowed-Regulated' status. The Act mandates that any entity offering virtual asset services to Botswana residents must obtain a license from the Non-Bank Financial Institutions Regulatory Authority (NBFIRA). This effectively criminalized the operation of unlicensed exchanges after a transitional period that ended in May 2022.
The regulatory regime is operational, evidenced by the issuance of licenses. In September 2022, Yellow Card Botswana (Pty) Ltd became the first entity to receive a Virtual Asset Service Provider (VASP) license. As of late 2024, the NBFIRA public register lists multiple regulated entities, including Express Minds (Pty) Ltd and Kalahari Exchange (Pty) Ltd. This demonstrates that the framework is not merely theoretical but actively enforced and utilized by the private sector.
The Bank of Botswana (BoB), while not the primary regulator for VASPs, plays a supporting role by monitoring financial stability. In its 2024 and 2025 financial stability reports, the BoB has acknowledged the Virtual Assets Act but continues to highlight potential risks related to AML/CFT and consumer protection. The central bank emphasizes that while trading is legal, virtual assets are not legal tender and do not enjoy the backing of the state.
From a retail perspective, residents can freely access these licensed platforms to buy, sell, and hold digital assets. Compliance with Financial Intelligence Agency (FIA) standards is strict, requiring robust KYC/AML checks for all users. Taxation is another key consideration; the Botswana Unified Revenue Service (BURS) treats gains from crypto disposal as taxable events, typically falling under Capital Gains Tax rules, or Income Tax for frequent traders deemed to be running a business.
Botswana has established itself as one of the few African jurisdictions with a comprehensive and active regulatory framework for cryptocurrencies. The turning point was the enactment of the **Virtual Assets Act, 2022**, which came into effect on February 25, 2022. This legislation moved the country from a 'buyer beware' environment to a formal 'Allowed-Regulated' status. The Act mandates that any entity offering virtual asset services to Botswana residents must obtain a license from the **Non-Bank Financial Institutions Regulatory Authority (NBFIRA)**. This effectively criminalized the operation of unlicensed exchanges after a transitional period that ended in May 2022. The regulatory regime is operational, evidenced by the issuance of licenses. In September 2022, **Yellow Card Botswana (Pty) Ltd** became the first entity to receive a Virtual Asset Service Provider (VASP) license. As of late 2024, the NBFIRA public register lists multiple regulated entities, including Express Minds (Pty) Ltd and Kalahari Exchange (Pty) Ltd. This demonstrates that the framework is not merely theoretical but actively enforced and utilized by the private sector. The **Bank of Botswana (BoB)**, while not the primary regulator for VASPs, plays a supporting role by monitoring financial stability. In its 2024 and 2025 financial stability reports, the BoB has acknowledged the Virtual Assets Act but continues to highlight potential risks related to AML/CFT and consumer protection. The central bank emphasizes that while trading is legal, virtual assets are not legal tender and do not enjoy the backing of the state. From a retail perspective, residents can freely access these licensed platforms to buy, sell, and hold digital assets. Compliance with **Financial Intelligence Agency (FIA)** standards is strict, requiring robust KYC/AML checks for all users. Taxation is another key consideration; the Botswana Unified Revenue Service (BURS) treats gains from crypto disposal as taxable events, typically falling under Capital Gains Tax rules, or Income Tax for frequent traders deemed to be running a business.
Source Evidence
Primary and secondary sources cited in this analysis
"A person shall not carry out or participate in a virtual asset business unless the person is the holder of a virtual asset service provider licence."
"All Virtual Asset Service Providers (VASPs) who have failed to apply for a license... are hereby called upon to immediately cease Virtual Asset operations."
"Yellow Card Botswana (Pty) Ltd... Express Minds (Pty) Ltd... Kalahari Exchange (Pty) Ltd"
"The Bank monitors developments in the virtual assets ecosystem... The Virtual Assets Act, 2022 provides for the regulation of the sale and trade of virtual assets."
"Yellow Card has made another significant stride in the industry, becoming the first cryptocurrency company on the continent to be granted a Virtual Asset Service Provider licence to operate in Botswana."
"Botswana introduced a virtual assets bill... demonstrating a bold move towards recognizing crypto assets."
Web Sources (4)
Sources discovered via web search grounding
Search queries used (9)
- Botswana Virtual Assets Act 2022 status
- Yellow Card Botswana license NBFIRA
- Botswana retail crypto trading legality
- Bank of Botswana cryptocurrency position 2024
- NBFIRA Botswana virtual asset license list
- Botswana cryptocurrency tax rules capital gains
- Yellow Card Botswana payment methods banks
- Botswana banks support crypto exchanges
- Botswana Unified Revenue Service crypto tax
https://www.nbfira.org.bw/news/licensing-virtual-assets-service-providers/
https://dig.watch/updates/botswanas-central-bank-calls-for-crypto-regulations
https://www.wearetech.africa/en/fils-uk/news/economy/yellow-card-secures-virtual-asset-provider-license-in-botswana
https://www.nbfira.org.bw/list-of-regulated-entities/virtual-assets-service-provider-regulated-entities/