The Legislative Landscape for Cryptocurrencies in Lesotho Prior to 2024

As of 2022, the legislative framework in Lesotho for cryptocurrencies was defined by caution and a focus on cyber security, rather than direct regulation of digital currencies. The Central Bank of Lesotho, in February 2018, stated that cryptocurrencies were neither recognized as legal tender nor considered foreign currency in Lesotho. This stance was significant as it underscored the government’s reluctance to integrate cryptocurrencies into the formal financial system. Moreover, promoting crypto investment opportunities was prohibited, with investment advisors required to be licensed under the Central Bank of Lesotho Capital Market Regulations of 2014. The Central Bank’s statement highlighted the risks associated with cryptocurrencies, particularly regarding anti-money laundering, combating of terrorist financing laws, tax laws, and exchange control laws​​.

In contrast to its cautious regulatory stance, the Lesotho government explored the potential benefits of blockchain technology and cryptocurrencies in various government departments and initiatives. In November 2019, the government signed a Memorandum of Understanding (MOU) with the Apollo cryptocurrency platform. This MOU aimed to implement blockchain and cryptocurrency in areas like education, poverty alleviation, employment, and the private sector. The Apollo cryptocurrency platform was expected to support initiatives such as a voting system, decentralized file storage, and a marketplace for trading physical and digital goods using the Apollo currency​​.

The main objectives of this initiative were focused on economic advancement and making the government operate more efficiently to address social problems. The goals included creating new wealth in the private sector, designing and implementing new government systems, reducing financial crime, maximizing the commercialization of the nation’s mineral wealth, and addressing challenges like unemployment, poverty, and educational constraints​​.

In 2022, the National Assembly of Lesotho approved the Computer Crimes and Cyber Security Bill, which aimed to combat cybercrimes and provide the state with powers to monitor cyberspace, define cybercrimes, and prescribe penalties for such crimes. The bill included a range of cybercrimes, such as data espionage, cyber terrorism, and cyber extortion. This development was a response to Lesotho’s previous lack of policies and strategies in cybersecurity, which left the nation vulnerable to various cybercrimes. The Bill’s approval was seen as a step towards advancing cyber-crime protection in Lesotho​​.

In summary, Lesotho’s approach to cryptocurrency regulation before 2024 was characterized by caution and a focus on cybersecurity. While the Central Bank of Lesotho did not recognize cryptocurrencies as legal tender, the government showed interest in exploring the potential benefits of blockchain technology in various sectors. The approval of the Computer Crimes and Cyber Security Bill marked a significant step towards addressing cybersecurity issues, which could have implications for the regulation of cryptocurrencies in the future.