Stablecoin issuer / redeemer in Botswana

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.

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.

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.

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.

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.

Algorithmic Stablecoin Rules:

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.

Botswana operates a prior-authorisation licensing regime rather than a registration regime: section 9 of the Virtual Assets Act, 2025 (Act No. 4 of 2025) prohibits unlicensed virtual asset business, section 10 governs the application for a licence, section 11 its issue, section 12 requires a licence holder to have a physical office in Botswana, section 15 empowers NBFIRA to suspend or revoke a licence, section 36 creates general offences and penalties and section 38 provides administrative sanctions.

The Virtual Assets Act, 2025 (Act No. 4 of 2025) is the overarching Botswana framework for virtual assets and virtual asset service providers, commencing 24 January 2025 under S.I. No. 9 of 2025 and repealing the Virtual Assets Act, 2022 by its section 40; it vests licensing and supervision in NBFIRA and maintains two licence types, the virtual asset service provider licence and the issuer of virtual token offerings licence recorded in the section 21 register.

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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.

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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.

The Virtual Assets Act, 2022 imposes no minimum capital on Botswana virtual asset licensees and gives NBFIRA no express power to demand a security deposit or financial guarantee; section 11 conditions the grant of a licence on the applicant being a fit and proper person with adequate resources, infrastructure and staff of appropriate competence, with financial status or solvency weighed under section 11(2)(a). The only Botswana text setting a financial-resources floor is the Virtual Assets Regulations, 2022 that NBFIRA publishes headed "Draft K. M 12.01.2022" with a blank Statutory Instrument number, whose regulation 4(1) would require cash equal to one half of estimated gross operating costs for the next 12 months.

Botswana is actively tightening its AML/CFT financial sanctions regime to address identified weaknesses, indicating the framework is being reformed rather than remaining a stable cornerstone already fully aligned with FATF standards.

Robust Policies and Procedures: VASPs must implement comprehensive internal AML/CFT policies, procedures, and controls.

Section 14(1)(a) of Botswana's Financial Intelligence Act, 2022 requires every specified party, which includes a virtual asset service provider, to designate an anti-money laundering and counter-financing of terrorism compliance officer at management level who is in charge of internal programmes and procedures, record maintenance and the reporting of suspicious transactions, and who must be a fit and proper person; neither that Act, nor the Virtual Assets Act, 2022, nor the Financial Intelligence Regulations, 2022 makes the appointment subject to approval by NBFIRA.

Customer Due Diligence (CDD): Implementing strong CDD measures for all customers, including identifying and verifying the identity of natural and legal persons, and beneficial owners.

Enhanced Due Diligence (EDD): Applying EDD for higher-risk customers or transactions.

Botswana requires a 20-year retention period, not five years. Section 32 of the Financial Intelligence Act, 2022 obliges a specified party, for 20 years, to maintain all records on domestic and international transactions from the date a transaction is concluded, and to keep customer due diligence records, account files, business correspondence and the results of any analysis for 20 years after the termination of a business relationship or an occasional transaction; regulation 18(3)(a) of the Financial Intelligence Regulations, 2022 likewise fixes at least 20 years for records of reports filed with the Financial Intelligence Agency, and an investigatory authority may require longer retention in writing.

Botswana's operative virtual-asset statute is the Virtual Assets Act, 2025 (Act No. 4 of 2025), which commenced on 24 January 2025 by Statutory Instrument No. 9 of 2025 and whose section 40 repeals the Virtual Assets Act, 2022 (Act No. 3 of 2022); the repealed 2022 Act was assented to and commenced on 25 February 2022 and was never numbered Act No. 19 of 2022, nor gazetted on 27 May 2022.

Non-Bank Financial Institutions Regulatory Authority (NBFIRA)

The prohibition on carrying on virtual asset business without a licence is section 9 of Botswana's Virtual Assets Act, 2025 (Act No. 4 of 2025), re-enacting section 9 of the repealed 2022 Act, and it requires a virtual asset service provider licence or an issuer of initial token offerings licence; section 5 of both Acts is instead the Regulatory Authority's power to request information.

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.

Botswana's operative anti-money-laundering statute is the Financial Intelligence Act, 2022 (Act No. 2 of 2022, Chapter 08:07), assented and commenced on 25 February 2022 and amended by the Financial Intelligence (Amendment) Act, 2025 (Act No. 1 of 2025); it repealed the Financial Intelligence Act, 2019, which was Act No. 11 of 2019 and not No. 17, and it binds virtual asset service providers as 'specified parties' with customer due diligence under sections 16 and 20 and twenty-year record keeping under section 32.

NBFIRA's AML/CFT guidance for virtual assets business is the guidance note 'Implementing AML/CFT Programmes', dated 10 March 2025 and issued under section 49(1)(c) of the Financial Intelligence Act, 2022 and section 4(1)(c) of the Virtual Assets Act, 2025; no NBFIRA virtual-asset AML/CFT guidance note bearing a November 2022 date is published.

The Value Added Tax (Amendment) Bill No. 22 of 2025, published 8 August 2025 and enacted as the Value Added Tax (Amendment) Act No. 16 of 2025, extends Botswana VAT to remote services supplied by non-residents and took effect 1 June 2026 by Statutory Instrument No. 72 of 2026; it creates no definition of digital assets. 'Digital currency' is defined instead by the Value Added Tax Bill No. 39 of 2025, published 15 December 2025, whose section 2(1) excludes digital currency from both 'goods' and 'money' and whose section 7(2) levies VAT at 14%.