by Lerato Lamola, Tebogo Mapitse, Partner from Bookbinder Business Law, Nawala Kamati, Partner from Engling, Stritter & Partners, Joseph Waring, Partner from Waring Attorneys, Nellie Tiyago, Partner from Scalen & Holderness, and Olivanda Bacar, Partner from ABCC
The digital revolution is reshaping the global financial landscape, with virtual assets emerging as a powerful force in how financial transactions are conducted. Also referred to as digital assets or crypto assets, virtual assets represent digital representations of value that are fundamentally transforming the financial sector.
In Africa, this transformation is particularly significant. The continent is well-positioned to harness fintech solutions to improve financial inclusion and expand access to essential services. Digital payments offer clear advantages such as safety, convenience, cost-efficiency and transparency.
Southern Africa offers a compelling case study of how various jurisdictions are responding to the rise of virtual assets. Webber Wentzel (South African firm), in collaboration with its relationship firm in Botswana (Bookbinder Business Law), Namibia (Engling, Stritter and Partners), Eswatini (Waring Attorneys), Zimbabwe (Scanlen and Holderness) and Mozambique (ABCC), has put together a comparative analysis, exploring the regulatory landscape, to understand how virtual assets are being defined, regulated and integrated into the financial system.
Defining virtual assets: Regional variations
While there is broad recognition across the region of the importance of virtual assets, definitions differ notably from country to country.
South Africa refers to virtual assets as 'crypto assets', describing them as digital representations of value not issued by a central bank, capable of being traded, transferred or stored electronically. These assets are used for payments, investments and other utilities, typically secured using cryptographic techniques and based on distributed ledger technology (DLT). Crypto assets are not legal tender and do not qualify as money in South Africa.
Botswana adopts a comprehensive definition that includes any digital representation of value that can be digitally traded or transferred, used for payment or investment, or distributed through DLT. However, it explicitly excludes digital representations of legal tender and securities regulated under its Securities Act.
Namibia's approach is closely aligned with regional standards, defining virtual assets as digital representations of value that can be transferred, stored or traded electronically using DLT. It similarly excludes fiat currencies and regulated securities.
Zimbabwe takes a different path by treating virtual assets as a type of security under its Securities and Exchange Act, while also referencing the FATF definition.
Mozambique opts for a straightforward definition, identifying virtual assets as digital representations of value that can be stored, traded or transferred digitally and used for payments or investments.
Regulatory status: Diverse approaches
The region presents a mix of regulatory maturity. South Africa, Botswana, Namibia and Mozambique have implemented clear regulatory frameworks for virtual assets. Eswatini has yet to introduce specific legislation, though its 2024 Anti-Money Laundering and Counter-Terrorism Act mandates that supervisory authorities establish frameworks for regulating virtual asset service providers (VASPs).
Zimbabwe occupies a more transitional space. While virtual assets are not yet comprehensively regulated, the Securities and Exchange Act and supporting regulations apply, with the Financial Intelligence Unit (FIU) playing a key role in shaping future frameworks.
Legislative frameworks and enforcement mechanisms
Each jurisdiction has taken a distinct legislative approach. South Africa regulates crypto assets under the Financial Advisory and Intermediary Services Act, with the Financial Sector Conduct Authority (FSCA) responsible for enforcement and its Financial Intelligence Centre taking responsibility for the anti-money laundering supervision and enforcement.
Botswana has enacted the Virtual Assets Act No. 3 of 2022, with oversight provided by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA).
Namibia has introduced one of the most detailed frameworks through the Virtual Assets Act No. 10 of 2023, supported by a suite of rules covering advertising, capital requirements, client disclosure, custody of client assets, cybersecurity, risk management and more. The Bank of Namibia is the designated regulator.
Mozambique relies on a combination of notices and laws, including Notice No. 4/GBM/2023, dated 14 September, on VASP registration and anti-money laundering regulations, all enforced by the Bank of Mozambique.
Licensing requirements and market entry
Licensing is required in most jurisdictions, though the structure and complexity vary:
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South Africa requires a Financial Services Provider (FSP) licence.
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Botswana mandates a Virtual Asset Business (VAB) licence.
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Namibia offers six distinct licence types, ranging from token issuance to custody, wallet services and advisory roles.
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Eswatini requires VASPs to obtain a licence under the AML legislation.
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Mozambique requires VASPs to register with the central bank.
Physical presence and operational requirements
Rules around physical presence also vary. Botswana and Namibia require licensed entities to maintain a physical presence. South Africa, Eswatini and Zimbabwe do not impose such requirements. Mozambique falls somewhere in between, requiring foreign VASPs to comply with local registration and compliance obligations without mandating physical presence.
Financial requirements reflect varying degrees of regulatory detail:
- South Africa mandates that crypto asset FSPs maintain sufficient financial resources to meet liabilities as they arise.
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Botswana requires VAB licence holders to maintain liquid assets equal to half of estimated gross operating costs for the following 12 months, plus base capital as determined by NBFIRA.
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Namibia sets the most detailed requirements, with minimum capital thresholds ranging from basic working capital to NAD 2.7 million for marketplace operators.
No jurisdiction in this analysis imposes local ownership requirements on VASPs. However, changes in ownership typically require regulatory approval, particularly where significant shareholding is involved. All regulated jurisdictions impose 'fit and proper' standards on shareholders and directors to ensure appropriate levels of competence, integrity and professional conduct.
Anti-money laundering and compliance obligations
A consistent feature across the region is the classification of VASPs as accountable institutions under anti-money laundering laws. This requires them to register with financial intelligence units and implement compliance frameworks covering customer due diligence, suspicious transaction reporting, and measures to combat money laundering, terrorist financing and proliferation financing.
Southern Africa is steadily developing a cohesive regulatory environment for virtual assets. While countries are at different stages of regulatory maturity, there is a clear trend toward comprehensive oversight that balances innovation with consumer protection and financial stability.
South Africa, Botswana, Namibia and Mozambique have made notable progress, while Eswatini and Zimbabwe are laying the groundwork for future regulation. The emphasis on anti-money laundering compliance across the board reflects a shared regional commitment to safeguarding financial systems while enabling technological advancement.
As the virtual asset ecosystem evolves, regulatory convergence across the region is likely, particularly around best practices and international standards. This emerging regulatory clarity is positioning Southern Africa as a promising environment for the responsible development and adoption of virtual assets.
For a more detailed analysis and jurisdiction-specific insights, download the full Virtual Assets Regulation in Southern Africa document below.
