Self-custodial wallet / non-custodial software in Botswana
Publisher of software where users hold their own private keys. The publisher never holds, controls, or has access to user funds.
Self-custodial wallet is conditionally permitted in Botswana without local incorporation, subject to AML obligations and none licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- No
- Licensing burden
- None
- Last updated
- 2026-07-13
Key Restrictions
- The publisher never holds, controls, or has access to user private keys or funds, and therefore does not meet the VASP definition under the Virtual Assets Act, 2025, which requires 'custody or administration of virtual assets or instruments enabling control over virtual assets'.
- Since the publisher is not a licensed VASP in Botswana, it cannot offer custodial or intermediation services — it may only publish non-custodial software.
- No local entity, license, or capital requirement applies provided the publisher does not engage in any of the licensed activities: exchange, custody, transfer, or participation in ICO/STO services.
Key Risks
- Regulatory ambiguity: NBFIRA may interpret software distribution as a 'virtual asset service' if the software is marketed specifically to Botswana residents or includes any features that facilitate network-side transaction routing.
- FATF-style guidance (e.g., VASP definition creep) could in the future classify non-custodial wallet publishers as VASPs if they charge fees, sell premium features, or exert influence over transaction flow.
- Consumer-protection or software-liability laws in Botswana (e.g., product liability, cybersecurity obligations under the Botswana Cybersecurity Bill, 2025) could apply to software publishers even absent VASP classification.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Evidence fact bw.licensing.custody-providers-safekeeping-andor-administration not found (may have been renamed).
Custody of client virtual assets is a licensed activity in Botswana: section 23 of the Virtual Assets Act, 2025 is headed 'Custody and protection of customer assets' and imposes obligations on licence holders, section 9 prohibits unlicensed virtual asset business, and NBFIRA's February 2026 PAA Capital notice lists custody among the regulated virtual asset services a revoked licensee may no longer offer.
Botswana's Virtual Assets Act places its interpretation provisions in section 2, not section 3, section 3 being the application provision; the repealed Virtual Assets Act, 2022 defined a virtual asset service provider as a person who under an agreement, as part of a business, undertakes a virtual asset service on behalf of another person, or who is a dealer or is willing to deal on own account by buying and selling virtual assets at prices set by that person, and the Virtual Assets Act, 2025 re-enacted that definition to cure the drafting deficiency ESAAMLG identified against the FATF standard.
Section 3 (Definitions): A "virtual asset service provider" is any person who, as a business, performs one or more of several enumerated activities, including "custody or administration of virtual assets or instruments enabling control over virtual assets."
Evidence fact bw.licensing.legal-entity-and-local-presence not found (may have been renamed).
Applicants must be a company incorporated in Botswana under the Companies Act.
Section 12 of the Virtual Assets Act, 2025 (Act No. 4 of 2025) is headed 'Licence holder to have physical office in Botswana' and requires a licensed virtual asset service provider to maintain a physical office in the country; the requirement is new and had no counterpart in the repealed Virtual Assets Act, 2022.
Senior management and key personnel are expected to be based in Botswana or demonstrate sufficient local oversight.
Botswana has two licence types only, the virtual asset service provider licence and the issuer of virtual token offerings licence recorded in the section 21 register of the Virtual Assets Act, 2025, so no 'Principal VASP Licence' exists; section 27 of that Act is headed 'Minimum capital requirements' but NBFIRA has published no capital figure, and the P500 000 unimpaired-capital floor in the claim has no source in Botswana law.
The Virtual Assets Act, 2025 provides for a virtual asset service provider licence and an issuer of virtual token offerings licence and for no other licence type, so no 'Limited VASP Licence' exists in Botswana; section 27 is headed 'Minimum capital requirements' and carries no published figure, and the P200 000 unimpaired-capital floor in the claim has no source in Botswana law.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — a pure non-custodial wallet publisher that never holds, controls, or has access to user private keys or funds does not meet the VASP definition under Botswana's Virtual Assets Act, 2025 (which requires 'custody or administration of virtual assets or instruments enabling control'), and therefore faces no licensing or AML obligations, but this conclusion depends on the publisher truly having zero custody or control and not marketing services that could be construed as intermediation.
Questions this verdict aims to answer
- Does software publishing trigger VASP / MSB classification?
- Do AML obligations attach when no custody exists?
- What disclosure or consumer-protection rules apply?