Crypto finds footing, but remains far from legal tender

Lewanika Timothy | Wednesday July 16, 2025 06:30

According to the bank’s latest Annual Report, the country now has two fully-licensed Virtual Asset Service Providers, being Yellow Card and Express Minds, operating legally under the Virtual Asset Act of 2022. These companies are authorised to facilitate crypto-related services, including the purchase, sale, and exchange of digital currencies, as well as peer-to-peer remittances and business payments.

This marks a significant shift in a region where regulatory clarity around digital assets is still emerging. However, despite these strides, the Bank of Botswana remains cautious. The bank in its annual report noted that whilst crytpo provided a plethora of digital opportunities it had its own challenges mainly associated with volatility.

'However, it’s crucial to acknowledge the potential challenges. Cryptocurrencies are characterised by high price volatility, raising questions about their viability as a reliable medium of exchange,' the report stated. 'Stablecoins, whilst designed to maintain a stable value, are subject to de-pegging risks if they lose their peg to the underlying asset. 'Regulatory uncertainty and the potential for illicit use are further concerns that need to be addressed to ensure the responsible development and adoption of these assets.'

The bank confirmed there is still no official cryptocurrency or stablecoin backed or issued by the government or any financial regulator in Botswana. Bitcoin, Ethereum, and other digital assets may be gaining traction in the local financial ecosystem, but they remain outside the bounds of state endorsement.

'Nonetheless, at present, there is no stablecoin specifically pegged to the Botswana pula nor any stablecoin uniquely tailored for Botswana’s economy,' the report revealed.

The report also highlights the sharp contrasts that define the crypto world. Whilst digital currencies offer perks such as borderless transactions, privacy, and decentralisation, they are still plagued by high price volatility, limited regulation, and the risk of being used for illicit purposes.

The Virtual Asset Act, administered by the Non-Bank Financial Institutions Regulatory Authority, provides a legal framework for crypto operations in the country. Still, the Bank’s message is clear: these assets are not legal tender.