Papua New Guinea

**Report: Retail Cryptocurrency Trading Status in Papua New Guinea**

**Topic:** Retail_Trading_Status

**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

**1. Identified Status:**
Allowed-UnRegulated

**2. Detailed Narrative Explanation:**

The legal status of retail cryptocurrency trading (buying, selling, holding by individuals) in Papua New Guinea (PNG) is best described as **Allowed-UnRegulated**. There is currently no specific legislation or regulatory framework in PNG that explicitly governs cryptocurrencies or the activities of Virtual Asset Service Providers (VASPs).

The Bank of Papua New Guinea (BPNG), the country's central bank and primary financial regulator, has made its position clear through public notices and statements:
*   **Cryptocurrencies are not legal tender:** BPNG explicitly states that cryptocurrencies like Bitcoin are not issued or backed by the central bank and do not have legal tender status in PNG.
*   **Cryptocurrencies are unregulated:** BPNG confirms that it does not regulate cryptocurrencies. This means there are no specific licenses for cryptocurrency exchanges operating within PNG, nor are there crypto-specific consumer protection mechanisms, KYC (Know Your Customer), or AML/CFT (Anti-Money Laundering/Countering Financing of Terrorism) regulations applied directly to crypto platforms under PNG law.
*   **Warnings Issued:** BPNG has issued warnings advising the public of the risks associated with investing in cryptocurrencies, highlighting their speculative nature and volatility, and the lack of consumer protection.
*   **No Explicit Ban:** Crucially, while BPNG advises caution and clarifies the lack of regulation and legal tender status, it has not explicitly banned individuals from buying, selling, or holding cryptocurrencies. The activity is permitted in the sense that it is not prohibited by law for individuals.

The absence of specific regulation means that retail trading largely occurs outside the purview of PNG's financial authorities. Individuals in PNG engaging with cryptocurrencies typically do so through international online platforms that accept users from PNG. While these platforms might have their own KYC/AML procedures based on their home jurisdiction, there are no PNG-specific requirements imposed on them.

General financial laws or commercial laws might theoretically apply to certain aspects of crypto transactions if they intersect with the traditional financial system, but there is no dedicated framework. BPNG and commercial banks like Bank South Pacific (BSP) have expressed concerns about the risks, particularly regarding AML/CFT and consumer protection. BSP has even blocked the use of its VISA cards for cryptocurrency transactions due to these concerns.

Despite the lack of regulation for private cryptocurrencies, BPNG is actively exploring the potential of blockchain technology for financial inclusion and is progressing with research and proof-of-concept testing for a Central Bank Digital Currency (CBDC), the "Digital Kina". This indicates an awareness of digital financial technology but a cautious approach towards regulating decentralized private cryptocurrencies versus exploring a state-controlled digital currency.

The overall environment is one where individuals *can* participate in the crypto market but do so at their own risk, without specific legal protections or regulatory oversight from PNG authorities.

**3. Relevant Text Excerpts:**

*   **Bank of Papua New Guinea (BPNG):** "BPNG does not issue or regulate cryptocurrencies (“i.e. virtual currencies or digital money such as bitcoin, Ethereum, EOS, Lite Coin and others”) and thus virtual currencies lack any legal tender status and is not accepted currency in Papua New Guinea." (Source: Freeman Law, referencing BPNG Public Notice)
*   **Bank of Papua New Guinea (BPNG) via Sector Risk Assessment:** "The Bank of PNG has made public statements advising the public 'cryptocurrencies are not currencies issued or regulated by PNG's Central Bank. They do not have any legal tender status to be accepted as a currency in PNG. Investment in such digital currencies is considered very risky and speculative in nature.'" (Source: Bank of PNG Sector Risk Assessment)
*   **Bank of Papua New Guinea (BPNG) via Sector Risk Assessment:** "That said, there is an absence of a legislative basis in PNG aimed at managing ML/TF risks relating to VA/VASPs." (Source: Bank of PNG Sector Risk Assessment)
*   **UPay Blog (summarizing status):** "Adoption status: Papua New Guinea (PNG) has not recognized cryptocurrency as legal tender or regulated its use. While it is not banned, crypto transactions lack formal legal protections." (Source: UPay Blog, Dec 2024)
*   **UPay Blog (on trading):** "While there is no outright ban on buying or trading cryptocurrencies in PNG, individuals engaging in these activities primarily use international exchanges that accept PNG users." (Source: UPay Blog, Dec 2024)
*   **Post Courier (reporting on BPNG statement, 2017):** "THE Bank of Papua New Guinea says while there is discussion abroad on a digital currency known as crypto-currency there is no policy to regulate this in the country." (Source: Post Courier, Mar 2017)
*   **Bank South Pacific (BSP):** "...due to concerns regarding the ability of BSP to have access to data relating to crypto currency transactions, and the authenticity of those transactions, we wish to advise that our VISA cardholders will no longer be able to perform transactions using their BSP issued VISA card for cryptocurrency type transactions." (Source: BSP Website)

**4. Source URLs:**

*   **Bank of PNG - Sector Risk Assessment (discussing lack of regulation and warnings):** [https://www.bankpng.gov.pg/wp-content/uploads/2024/02/VAVASP-Risk-Assessment-Report-Final-Publication.pdf](https://www.bankpng.gov.pg/wp-content/uploads/2024/02/VAVASP-Risk-Assessment-Report-Final-Publication.pdf) (Note: This links to the PDF report containing the cited information)
*   **Freeman Law (Summarizing BPNG stance):** [https://freemanlaw.com/papua-new-guinea-cryptocurrency/](https://freemanlaw.com/papua-new-guinea-cryptocurrency/)
*   **UPay Blog (Overview Dec 2024):** [https://blog.upay.co.uk/crypto-adoption-around-the-world-papua-new-guinea-png/](https://blog.upay.co.uk/crypto-adoption-around-the-world-papua-new-guinea-png/)
*   **Post Courier (2017 BPNG statement):** [https://postcourier.com.pg/no-regulation-crypto-currency/](https://postcourier.com.pg/no-regulation-crypto-currency/)
*   **Bank South Pacific (BSP) - Statement on Cryptocurrencies:** [https://www.bsp.com.pg/cryptocurrencies/](https://www.bsp.com.pg/cryptocurrencies/)
*   **Global Government Fintech (CBDC Progress):** [https://www.globalgovernmentfintech.com/papua-new-guinea-progresses-cbdc-explorations/](https://www.globalgovernmentfintech.com/papua-new-guinea-progresses-cbdc-explorations/)
*   **The National (BSP CEO comments & BPNG warning reference):** [https://www.thenational.com.pg/bsp-cryptocurrency-risky/](https://www.thenational.com.pg/bsp-cryptocurrency-risky/)