Nicaragua - New regulations for providers of financial services of payment services and virtual assets
By means of Resolution CD-BCN-XXV-1-22 published in The Gazette, Official Diary No. 76 last Wednesday, April twenty-seventh, two thousand twenty-two, the Central Bank of Nicaragua (hereinafter "BCN") issued the Regulations for Financial Technology Providers of Payment Services and Virtual Assets Service Providers (hereinafter the "Regulations").
The object of the Regulations is to establish the general provisions to control the process of application, authorization, operation and regulation of financial technology for payment service providers (hereinafter "PSP" in Spanish) and virtual assets service providers (hereinafter "PSAV” in Spanish).
For a better comprehension, the Regulation defines a PSP and a PSAV as follows:
- PSP: Refers to legal entities authorized and regulated by the BCN, engaged in providing payment services with (i) digital wallets, (ii) mobile points of sale, (iii) electronic money, (iv) electronic trading and currency exchange services, (v) funds transfer services, (vi) online payment gateways, and (vii) other novel payment services catalogued by the BCN's Board of Directors.
- PSAV: Refers to legal entities authorized and regulated by the BCN that perform one or more of the following activities or operations, for or on behalf of another natural or legal person: (i) exchange between virtual assets and fiat currencies; (ii) exchange between one or more forms of virtual assets, (iii) transfer of virtual assets; (iv) custody and/or administration of virtual assets or instruments that allow control over virtual assets; and (v) participation and provision of financial services related to the offer of an issuer and/or sale of a virtual asset.
The Regulation establishes that PSPs and PSAVs, in order to provide the referred services, they shall be constituted as a legal entity in the country, reside and have a physical office in Nicaragua. Furthermore, prior to the performance of their activities or operations, they shall apply for registration and an operating license issued by the BCN
These operation licenses will become legally effective as of its publication in The Gazzete, Official Diary. Upon this act, entities subject of supervision such as the Superintendence of Banks and Other Financial Institutions (SIBOIF), the National Microfinance Commission (CONAMI) and the Financial Analysis Unit (UAF) in the Register of Obligated and Supervised Entities in terms of ML/FT/FP prevention will be informed of its registration and control.
It also establishes an obligation to provide to BCN all technological, administrative, financial, statical, legal regulatory or any other information that it requires. Moreover, these regulations also provide the infringement causes and corresponding fines for non-compliance.