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Belize

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#135
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Archived
Created
2025-04-12 06:49
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Live

Executive Summary

Belize permits individuals to buy, sell, and hold cryptocurrencies under a regulated environment overseen by the Financial Services Commission (FSC). The FSC Act of 2023 brought virtual asset activities under its scope, requiring businesses to obtain licenses, but there's a moratorium on issuing new licenses until December 31, 2025. Key requirements include AML/KYC compliance, and the country aligns with international standards like CARF. The FSC and Central Bank have issued warnings about the risks associated with cryptocurrency investments.

Key Pillars

The primary regulator is the Financial Services Commission (FSC) of Belize, which oversees non-bank financial services and virtual asset activities. Core compliance requirements include Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures, as stipulated in the Money Laundering and Terrorism (Prevention) Act. Licensing is required for businesses involved in virtual asset activities, but there is a temporary moratorium on issuing new licenses until December 31, 2025.

Landmark Laws

  • Financial Services Commission Act, Act No. 8 of 2023: Enacted in 2023, it brought virtual asset activities under the FSC's scope and prohibited carrying on business involving virtual assets without a license. * Money Laundering and Terrorism (Prevention) Act: Establishes AML/CFT regulations and requires financial institutions, including future licensed VASPs, to implement KYC procedures.

Considerations

Cryptocurrencies and virtual assets are defined as any digital representation of value that can be digitally traded, transferred, or used for payment or investment purposes. The FSC and Central Bank have issued warnings to the public regarding the risks associated with investing in cryptocurrencies, highlighting their speculative nature, volatility, lack of legal tender status, and the potential for fraud. A moratorium on virtual asset licenses is in effect until December 31, 2025.

Notes

Prior to the FSC Act 2023, Belize did not appear to have specific legislation regulating cryptocurrencies. An IFSC Public Statement in 2019 reflects ongoing caution, advising the public to act with extreme caution when investing in virtual currencies. Belize has joined international frameworks like the OECD's Crypto-Asset Reporting Framework (CARF).

Detailed Explanation

In Belize, individual citizens and residents are permitted to buy, sell, and hold cryptocurrencies, but the environment is 'Allowed-Regulated'. There is no standalone legal framework specifically for cryptocurrencies. The Financial Services Commission (FSC) of Belize oversees virtual asset activities, especially following the enactment of the Financial Services Commission Act, Act No. 8 of 2023. Section 81 of the FSC Act explicitly prohibits carrying on business involving virtual assets without a license. Virtual assets include cryptocurrencies, stablecoins, and NFTs. Activities covered by the licensing requirement include negotiation, brokerage, exchange, transfer, custody, and management of virtual assets. Section 81(3) of the FSC Act stipulates that the FSC will not issue any licenses for virtual asset activities before December 31, 2025. Businesses conducting such activities before the Act's commencement (April 15, 2023) were required to notify the FSC and cease operations by July 15, 2023. Until specific crypto regulations are implemented, existing laws like the Securities Industry Act may apply if a crypto-asset qualifies as a security. Belize has Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations in place, such as the Money Laundering and Terrorism (Prevention) Act, which any future licensed virtual asset service providers (VASPs) will be subject to. These regulations require implementing Know Your Customer (KYC) procedures for customer identification and verification, ongoing monitoring, and reporting suspicious transactions. Both the FSC and potentially the Central Bank of Belize have issued warnings regarding the risks associated with investing in cryptocurrencies, highlighting their speculative nature, volatility, lack of legal tender status, and potential for fraud. Belize has joined international frameworks like the OECD's Crypto-Asset Reporting Framework (CARF). The provision of crypto-related financial services within Belize is strictly regulated and currently under a licensing moratorium until the end of 2025, potentially leading residents to rely on international platforms.

Summary Points

Here's a bullet-point summary of the Retail_Trading_Status regulatory analysis report for Belize, designed for quick comprehension:

Retail Cryptocurrency Trading Status in Belize: Summary (April 12, 2025)

I. Overall Regulatory Status:

  • Allowed-Regulated: Individuals can buy, sell, and hold cryptocurrencies. However, the provision of crypto-related services is heavily regulated.

II. Key Regulatory Bodies & Roles:

  • Financial Services Commission (FSC):
    • Primary regulator for non-bank financial services, including virtual asset activities.
    • Responsible for licensing and oversight of virtual asset service providers (VASPs) after the current moratorium.
  • Central Bank of Belize:
    • Issues warnings and guidance related to virtual assets.
    • Works in conjunction with the FSC on AML/CFT strategies.

III. Key Legislation & Regulations:

  • Financial Services Commission Act, Act No. 8 of 2023:
    • Brought virtual asset activities under the FSC's regulatory scope.
    • Requires licenses for businesses involved in virtual asset activities (negotiation, brokerage, exchange, transfer, custody, management).
    • Section 81(3): Imposes a moratorium on issuing licenses for virtual asset activities until December 31, 2025.
  • Securities Industry Act:
    • May apply if a specific crypto-asset qualifies as a security.
  • Money Laundering and Terrorism (Prevention) Act:
    • Establishes AML/CFT requirements.

IV. Compliance Requirements (Primarily for VASPs, Post-Moratorium):

  • Licensing: Required for businesses providing virtual asset services after December 31, 2025.
  • AML/CFT Compliance:
    • Know Your Customer (KYC) procedures for customer identification and verification.
    • Ongoing monitoring of transactions.
    • Reporting suspicious transactions.
  • Adherence to FSC Regulations: Compliance with all rules and guidelines issued by the FSC.
  • CARF Compliance: Adherence to the OECD's Crypto-Asset Reporting Framework (CARF) for automatic exchange of information between tax authorities.

V. Notable Restrictions & Limitations:

  • Licensing Moratorium: The FSC will not issue any licenses for virtual asset activities before December 31, 2025.
  • Limited Domestic Options: Residents likely rely on international platforms due to the licensing restrictions on domestic VASPs.
  • Regulatory Uncertainty: Specific crypto regulations are still evolving, leading to some uncertainty.

VI. Recent Developments & Changes:

  • Enactment of the Financial Services Commission Act, Act No. 8 of 2023: Significantly changed the regulatory landscape by bringing virtual assets under the FSC's purview.
  • Imposition of Licensing Moratorium: Effectively halted the establishment of new, licensed domestic crypto exchanges or service providers until at least 2026.
  • Increased Focus on AML/CFT: Emphasis on KYC and AML compliance for any future licensed VASPs.
  • Adoption of CARF: Alignment with international standards for transparency in crypto transactions.

VII. Important Considerations:

  • Official Warnings: The FSC and Central Bank have issued warnings about the risks associated with investing in cryptocurrencies.
  • Reliance on Existing Laws: Activities involving cryptocurrencies may be subject to existing financial laws (e.g., Securities Industry Act) in the absence of specific crypto regulations.

Full Analysis Report

Financial Regulatory Analyst Report: Retail Cryptocurrency Trading Status in Belize

Date: April 12, 2025

Topic: Retail_Trading_Status

Description: Assessment of the legal permissibility for individual citizens and residents in Belize to buy, sell, and hold cryptocurrencies, including the regulatory environment surrounding this activity (e.g., KYC/AML requirements, official warnings).

1. Current Status: Allowed-Regulated

2. Narrative Explanation:

Individual citizens and residents in Belize are generally permitted to buy, sell, and hold cryptocurrencies, as there is no specific law banning such activities for individuals. However, the regulatory environment is complex and evolving, placing it under the category of "Allowed-Regulated" rather than "Unregulated" or "Unclear".

Belize does not currently possess a comprehensive, standalone legal framework specifically designed for cryptocurrencies or virtual assets. Instead, activities involving cryptocurrencies fall under the purview of existing financial legislation and are overseen by the Financial Services Commission (FSC) of Belize, particularly following the enactment of the Financial Services Commission Act, Act No. 8 of 2023.

Key points defining the regulatory landscape:

  • Regulatory Authority: The Financial Services Commission (FSC) is the primary regulator for non-bank financial services in Belize. While it previously stated it did not regulate or license virtual currency trading specifically, the FSC Act of 2023 brought virtual asset activities under its scope.
  • Licensing Requirement for Businesses: The FSC Act (Section 81) explicitly prohibits carrying on business involving virtual assets (defined to include cryptocurrencies, stablecoins, NFTs, etc.) without a license. This includes activities like negotiation, brokerage, exchange, transfer, custody, and management of virtual assets.
  • Temporary Moratorium on Licenses: Crucially, Section 81(3) of the FSC Act stipulates that the FSC will not issue any licenses for virtual asset activities before December 31, 2025. Businesses conducting such activities prior to the Act's commencement (April 15, 2023) were required to notify the FSC and cease operations by July 15, 2023. This effectively halts the establishment of new, licensed domestic crypto exchanges or service providers until at least 2026.
  • Application of Existing Laws: While awaiting specific crypto regulations, activities involving cryptocurrencies might still be captured under existing laws like the Securities Industry Act (if a specific crypto-asset qualifies as a security) or general financial services regulations.
  • AML/CFT Requirements: Belize has Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations in place (e.g., Money Laundering and Terrorism (Prevention) Act). Financial institutions and entities regulated by the FSC, including any future licensed virtual asset service providers (VASPs), are subject to these requirements. This includes implementing Know Your Customer (KYC) procedures for customer identification and verification, ongoing monitoring, and reporting suspicious transactions. While individual retail trading itself isn't directly regulated in this manner, any platform facilitating such trades would be subject to these rules if licensed.
  • Official Warnings: Both the FSC and potentially the Central Bank of Belize have issued warnings to the public regarding the risks associated with investing in cryptocurrencies, highlighting their speculative nature, volatility, lack of legal tender status, and the potential for fraud. These warnings advise caution but do not constitute a ban on ownership or trading by individuals.
  • International Cooperation: Belize has joined international frameworks like the OECD's Crypto-Asset Reporting Framework (CARF) for the automatic exchange of information between tax authorities regarding crypto transactions, indicating an intent to align with global standards for transparency.

In summary, while individuals can legally own and trade crypto, the provision of crypto-related financial services within or from Belize is strictly regulated and currently under a licensing moratorium until the end of 2025. This means residents likely rely on international platforms, which operate outside the direct, day-to-day supervision of the Belize FSC concerning their crypto operations (though AML/CFT principles apply broadly). The status is therefore "Allowed-Regulated" because individual activity is not prohibited, but the ecosystem within which it occurs (especially service provision) is subject to FSC oversight and specific (currently restrictive) licensing rules under the FSC Act 2023, alongside general AML/CFT obligations.

3. Supporting Excerpts:

  • On the legality for individuals and lack of specific crypto law (pre-FSC Act 2023 context, still relevant for individual ownership):
    • "Belize does not appear to have any legislation that specifically regulates cryptocurrencies." (Source: Library of Congress [8], Freeman Law [6])
    • "Cryptocurrencies are legal, although there is no specific regulation dealing with cryptocurrency." (Source: Cryptocurrency Regulation Tracker [3])
  • On the FSC's regulatory role and the FSC Act 2023:
    • "The Act strictly forbids the conduct of business involving virtual assets (defined to include cryptocurrencies, stable-coins, non-fungible tokens (NFTs), and certain in-game currencies) without a license. This covers activities such as the negotiation, brokerage, exchange, transfer, and management of virtual assets." (Source: CILTrust [5], Essential Notices from Belize's FSC [7])
    • "Section 81 (1) of the FSC Act provides for prohibition against persons carrying on virtual asset activities in or from within Belize, including exchanging or owning of virtual assets without a requisite license." (Source: Central Bank of Belize AML Strategy Notice [14])
    • "'virtual asset' means any digital representation of value that can be digitally traded, transferred, or used for payment or investment purposes, including but not limited cryptocurrencies..." (Source: Financial Services Commission Act, 2023 [16])
  • On the Moratorium on Licensing:
    • "Moreover, until the 31st day of December 2025, the FSC will not issue any licenses for these virtual asset activities." (Source: CILTrust [5], Essential Notices from Belize's FSC [7])
    • "Section 81 (3) of the FSC Act stipulates that no licenses for virtual assets activities will be issued on or before 31 December 2025." (Source: Central Bank of Belize AML Strategy Notice [14])
  • On AML/KYC Importance:
    • "To prevent illegal action, Belize, like most developing markets, is cautious about KYC and AML." (Source: UPay Blog [2])
    • "Belize introduced its framework on anti-money laundering and countering the financing of terrorism... This framework also contains provisions regarding customer screening, identification and verification of customers." (Source: Shufti Pro - Belize AML KYC Regulations [21])
    • Applicants [for future licenses] yield a point by point arrangement for conformance with KYC and AML routines. (Source: YB Case 2025 [13] - Note: Refers to potential future licensing requirements)
  • On Official Warnings:
    • "IFSC advises the public to act with extreme caution and understand the substantial risks they take on if they choose to invest in virtual currencies and in dealing with cryptocurrency exchanges... the IFSC does not regulate or license trading in virtual currencies. Therefore, the public will have no regulatory recourse or safeguard for losses..." (Source: IFSC Public Statement 2019 [10] - Note: Pre-FSC Act 2023, but reflects ongoing caution)
    • The FSC has issued various "Warning Notice Crypto Investment Trade" documents against specific potentially fraudulent schemes. (Source: FSC Website [22])

4. Source Links:

End of Report

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