Crypto oversight gaps persist in Botswana
Pauline Dikuelo | Monday February 23, 2026 06:02
This is according to the latest follow-up assessment conducted by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG).
VASP are companies or individuals that help people buy, sell, exchange, store or manage virtual assets like cryptocurrencies.
Last year, Bank of Botswana revealed that the country had two fully licensed VASPs operating legally under the Virtual Assets Act of 2022, adding that there is still no official cryptocurrency or stablecoin backed or issued by the government or any financial regulator in Botswana. However, the bank said Bitcoin, Ethereum and other digital assets may be gaining traction in the local financial ecosystem, although they remain outside the bounds of state endorsement.
The follow-up report evaluates the country’s progress in addressing technical compliance deficiencies identified in its 2018 Mutual Evaluation Report (MER) and subsequent follow-up reviews.
According to ESAAMLG’s assessment of Botswana’s anti-money-laundering and counter-terrorist financing measures, the country has internally classified the VASP sector as high risk for money-laundering and terrorism financing activities.
However, reviewers noted that authorities have not provided sufficient evidence or a clear rationale to support this classification. The risk rating is said to be based on an internal assessment rather than a formal, sector-wide risk assessment. As a result, assessors indicated that it is difficult to determine whether the risk-based approach being implemented by regulators, including the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), is grounded in a reliable and comprehensive understanding of ML/TF risks.
In the absence of a formal risk assessment of virtual asset activities and VASPs, reviewers are of the view that Botswana is not yet in a position to effectively apply a risk-based approach or implement proportionate risk mitigation measures.
“In the absence of a risk assessment, reviewers are of the view that Botswana is unable to apply a risk-based approach and implement risk-based measures; hence, the criterion remains not met,” the report states.
On a positive note, the findings further reveal that Botswana has introduced legal requirements for VASPs to assess ML/TF risks and consider factors such as customers, countries or geographical areas, as outlined in the Financial Intelligence Act, 2022.
Botswana has also made progress in addressing several deficiencies, including implementing measures to identify and address VASPs operating without registration and issuing guidelines to VASPs. Nevertheless, moderate shortcomings remain regarding the assessment of ML/TF risks related to the development of new products and business practices, including new delivery mechanisms and the use of new or developing technologies for both new and existing products.
In the absence of a comprehensive risk assessment, reviewers said Botswana remains unable to effectively apply a fully risk-based approach. Moreover, there is no evidence that NBFIRA has commenced risk-based supervision or monitoring of VASPs’ compliance with national AML/CFT requirements.
Meanwhile, Botswana has introduced sections in the Virtual Asset Act which mandate that VASPs obtain and maintain accurate information about the beneficiary of a virtual asset transfer and submit this information to the regulatory authority. Furthermore, VASPs that send or receive virtual assets into or out of Botswana equal to or exceeding the prescribed threshold under the Financial Intelligence Act, through a transfer on behalf of a customer or any person, are required to submit a report on the transaction to the Financial Intelligence Agency.
ESAAMLG, established in 1999 in Arusha, Tanzania, comprises 21 member states and works alongside regional and international observers such as the Financial Action Task Force (FATF), the IMF, World Bank, SADC, and the United Nations to enhance AML/CFT systems across Eastern and Southern Africa.