Botswana -- Stablecoin Regulations Regulatory Overview

Stablecoins in Botswana fall under the generic virtual-asset definition in the Virtual Assets Act, 2025 (Act No. 4 of 2025), which commenced on 24 January 2025 and whose section 40 repeals the Virtual Assets Act No. 3 of 2022; Botswana has enacted no Investment and Securities Act, 2025 and has no stablecoin-specific instrument.

The Botswana Virtual Assets Act defines a virtual asset as a digital representation of value that may be digitally traded or transferred and may be used for payment or investment purposes; the Virtual Assets Act No. 3 of 2022 excluded only a digital representation of legal tender under the Bank of Botswana Act and securities and other financial assets regulated under the Securities Act, and carried no closed-loop exclusion, so a fiat-referenced stablecoin remains inside the definition.

The Non-Bank Financial Institutions Regulatory Authority licenses virtual asset service providers in Botswana under Part III of the Virtual Assets Act, 2025, and the Virtual Assets Act No. 3 of 2022 that it replaced was itself a licensing regime rather than a registration regime; the Financial Intelligence Agency has never held a virtual-asset licensing function.

Botswana has no National Payment System Act, 2018; electronic payment services and the issuance of electronic money are governed by the National Clearance and Settlement Systems Act, 2003 (Cap. 46:06) and the Electronic Payment Services Regulations, 2019 (Statutory Instrument No. 2 of 2019, promulgated 4 January 2019), administered by the Bank of Botswana.

If a stablecoin is designed to function as an electronic store of monetary value for making payments, is denominated in fiat currency (like BWP), and is redeemable at par, the Bank of Botswana (BoB) would likely classify its issuer as an Electronic Money Issuer (EMI).

Reference: National Payment System Act, 2018 (Available on the Bank of Botswana website or Botswana Parliament Website)

Securities: It is less likely for typical fiat-backed stablecoins to be classified as securities unless they grant rights akin to equity (e.g., profit-sharing, voting rights) or represent a claim on future revenue streams of an enterprise. The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) oversees securities.

The Botswana Virtual Assets Act confers no redemption right on stablecoin holders and carries no stablecoin-specific provision; it is a licensing and conduct statute whose Part IV obligations cover custody and protection of customer assets (s. 23), prevention of market abuse (s. 24), minimum capital requirements (s. 27), offer of virtual assets (s. 28), issuance of a white paper (s. 29) and classification of virtual assets (s. 30), while anti-money-laundering duties sit in the Financial Intelligence Act, 2022 as amended in 2025.

No National Payment System Act exists in Botswana; the Bank of Botswana licenses electronic payment service providers, a category that expressly covers the issuance of electronic money, under the Electronic Payment Services Regulations, 2019 (S.I. No. 2 of 2019) made under the National Clearance and Settlement Systems Act, 2003, and no Botswana instrument imposes reserve requirements on stablecoin issuers.

EMIs are typically required to hold funds equivalent to the e-money issued in highly liquid and low-risk assets (e.g., central bank money, government bonds) in segregated accounts, ensuring 1:1 backing and safeguarding of customer funds.

Under Virtual Assets Act (VAA): Any entity providing services related to virtual assets, including the issuance, exchange, transfer, custody, or administration of virtual assets (which stablecoins are), is considered a Virtual Asset Service Provider (VASP).

Virtual asset service providers in Botswana are licensed and supervised by the Non-Bank Financial Institutions Regulatory Authority under the Virtual Assets Act, 2025, not by the Financial Intelligence Agency; NBFIRA also acts as their AML/CFT supervisory authority under section 49(1)(c) of the Financial Intelligence Act, 2022 as amended in 2025.

Reference: Virtual Assets Act, 2022 and Financial Intelligence Agency (FIA) website for VASP registration guidelines: https://www.fia.org.bw/

Under Virtual Assets Act (VAA): While the VAA doesn't explicitly detail redemption rights for stablecoins, general consumer protection laws and contractual agreements between the issuer and holder would govern these rights for stablecoins only classified as general virtual assets. However, the regulatory oversight under VAA is primarily for AML/CFT.

Botswana has no rule addressing algorithmic stablecoins; the Virtual Assets Act, 2025 (Act No. 4 of 2025), which commenced on 24 January 2025 and by section 40 repealed the Virtual Assets Act No. 3 of 2022, creates no stablecoin category and regulates every virtual asset through one generic definition.

Given the BoB's cautious stance on unregulated cryptocurrencies and the inherent volatility and lack of direct fiat backing of most algorithmic stablecoins, they would likely be treated purely as "virtual assets" under the VAA. They would almost certainly not qualify as e-money under the NPS Act due to their algorithmic nature and lack of 1:1 fiat backing.

The Bank of Botswana's press release of 10 November 2021, Statement on Crypto Assets Participation and Regulation, warned that crypto assets have no backing by the state or central bank with respect to legal tender status, that the underlying activity may relate to pyramid schemes and scams, and that the public would have no recourse to the Bank for redress; its accompanying statement that no specific legal or regulatory framework existed was superseded by the Virtual Assets Act No. 3 of 2022, assented and commenced on 25 February 2022.

Reference: Bank of Botswana Public Notice on Cryptocurrencies (Specific date may vary, but such notices are periodically issued and available on the BoB website).

The Bank of Botswana has committed to assessing central bank digital currency rather than issuing one: strategic actions 11.3(a) and 11.3(e) of its National Payments System Vision and Strategy 2020-2024 require the Bank to review and assess the potential impact of new technologies including Central Bank Digital Currencies and to assess the impact of stable coins and central bank issued digital currency, and no Botswana central bank digital currency has been issued.

The Bank of Botswana has published no National Payments System Strategy for 2022-2027; its payments strategy is the National Payments System Vision and Strategy 2020-2024, published on 14 July 2020, whose strategic action 11.3(e) commits the Bank to assess the impact of stable coins and central bank issued digital currency and whose action 11.3(a) commits it to review and assess the potential impact of Central Bank Digital Currencies.

A Botswana CBDC would be viewed by the BoB as a safer, state-backed alternative or complement to private digital currencies, including stablecoins. The BoB would aim for a CBDC to enhance payment efficiency, financial inclusion, and monetary policy effectiveness, while maintaining financial stability.

The development of a CBDC framework would likely influence or run parallel to how the BoB regulates private stablecoins, potentially creating a clearer distinction between central bank-issued digital currency and privately issued ones.

Reference: Bank of Botswana National Payment System Strategy (2022-2027) (Available on the Bank of Botswana website under Publications/Reports)

The Virtual Assets Act, 2025 (Act No. 4 of 2025) is Botswana's primary virtual-asset legislation and reaches stablecoins through its generic virtual-asset definition; its section 40 repeals the Virtual Assets Act No. 3 of 2022, and the Non-Bank Financial Institutions Regulatory Authority, not the Financial Intelligence Agency, licenses and supervises virtual asset businesses.

Botswana has enacted no National Payment System Act, 2018; the Bank of Botswana licenses electronic payment services, including the issuance of electronic money, under the Electronic Payment Services Regulations, 2019 (Statutory Instrument No. 2 of 2019, promulgated 4 January 2019) made under the National Clearance and Settlement Systems Act, 2003 (Cap. 46:06), and no Botswana instrument subjects stablecoin issuers to reserve requirements.

The Bank of Botswana conducts monetary policy, issues the pula and oversees the national payment system under the National Clearance and Settlement Systems Act, 2003 (Cap. 46:06); it licenses electronic payment service providers, a category covering the issuance of electronic money, under the Electronic Payment Services Regulations, 2019, it has committed only to assessing central bank digital currency under its National Payments System Vision and Strategy 2020-2024, and it holds no virtual-asset licensing function.

The Financial Intelligence Agency does not license virtual asset service providers in Botswana; the Non-Bank Financial Institutions Regulatory Authority licenses them under Part III of the Virtual Assets Act, 2025 and acts as their AML/CFT supervisory authority under section 49(1)(c) of the Financial Intelligence Act, 2022 as amended in 2025.