VASPs brought under supervision of Nicaragua’s central bank
Through Resolution CD-BCN-XXV-1-22, gazetted on April 27, 2022, the central bank released the Regulations for Financial Technology Providers of Payment Services and Virtual Assets Service Providers (Reglamento de los Proveedores de Tecnología Financiera de Servicios de Pago y Proveedores de Servicios de Activos Virtuales).
For the purposes of the regulations, a PSP is defined as an entity that provides payment services with digital wallets, mobile points of sale, electronic money, electronic trading and currency exchange services, funds transfer services or online payment gateways.
A VASP is defined as a legal entity performing one or more of the following activities for another legal person: exchange between virtual assets and fiat currencies; exchange between, transfer of or administration of virtual assets; and provision of financial services related to the offer of an issuer or sale of a virtual asset.
Under the regulations, any firm wishing to operate as a PSP or VASP must be resident in Nicaragua, have a physical office there and apply to the central bank for registration and an operating license. Such entities will have an obligation to provide the central bank with any technological, administrative, financial, legal or regulatory information requested.
The regulation of PSPs and VASPs aims to support Nicaragua’s anti-money laundering regime. Penalties for entities that fail to comply with the new regulations range from reprimands to financial fines.
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