Laos

Okay, here is the comprehensive report on the current status of retail cryptocurrency trading in Laos, structured as requested.
## Report: Retail Cryptocurrency Trading Status in Laos

**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)
**Date of Assessment:** April 13, 2025

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**1. Identified Status:** **Banned**

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**2. Detailed Narrative Explanation:**

The legal status of retail cryptocurrency trading (buying, selling, holding) for individual citizens and residents in Laos is best categorized as **Banned**. This status stems primarily from explicit warnings and prohibitions issued by the country's central bank, the Bank of the Lao PDR (BOL), directed at the general public and financial institutions.

**Historical Context and Prohibitions:**
The BOL has issued multiple warnings against the use of cryptocurrencies. Notably:
*   In **October 2018**, the BOL issued an announcement prohibiting financial institutions from possessing, engaging in, or encouraging cryptocurrency transactions. Banks were instructed to prevent customers from using their accounts for crypto activities.
*   Subsequent warnings were issued in **May 2019** and **August/September 2021**, reiterating the ban and cautioning the public against buying, selling, or using cryptocurrencies like Bitcoin, Ethereum, and Litecoin for transactions, citing risks, volatility, lack of legal recognition as currency under the Law on Payment Systems, and potential use in illicit activities like money laundering.

These directives explicitly targeted the general public and businesses, warning them against participating in crypto trading and using crypto as a means of payment, deeming such practices illegal under existing frameworks.

**Pilot Program and Licensed Entities (Nuance):**
In **September 2021**, facing economic pressures exacerbated by the COVID-19 pandemic and seeking new revenue streams (particularly leveraging its hydropower surplus), the Lao government initiated a shift by authorizing a pilot program for cryptocurrency mining and trading. This was formalized through regulations like the Ministry of Technology and Communication's (MTC) Decision No. 888 (November 2021) and the BOL's Decision No. 777 (December 2021), establishing rules for a trial period.

Under this pilot program:
*   Six companies were initially authorized to explore mining and trading.
*   In **January 2022**, the BOL granted licenses to two specific platforms, Lao Digital Assets Exchange (LDX) and Bitqik, to operate as regulated cryptocurrency exchanges. These were designated as the *only* licensed institutions permitted to offer brokerage and trading services within Laos.

**Why "Banned" Remains the Status for Retail Individuals:**
Despite the licensing of these two exchanges, the status for the *general retail public* remains effectively "Banned" for several reasons:
*   **Explicit Prohibitions Not Rescinded:** The BOL's prior warnings and prohibitions directed at the general public regarding the buying, selling, and use of cryptocurrencies have not been explicitly withdrawn or superseded by a general allowance for retail participation.
*   **Pilot Program Focus:** The pilot program and the licensing framework appear primarily focused on controlling specific, authorized *entities* (the exchanges and mining operations) rather than opening up the market freely to individual retail traders. An IMF report from August 2023 noted that the development of these domestic platforms seemed largely aimed at absorbing crypto from the licensed mining industry and creating a controlled domestic marketplace, rather than primarily serving retail users.
*   **Limited Access:** The pilot program limited the number of licensed trading platforms to just two. Access for the average citizen to these platforms, their specific KYC/AML requirements for retail users, and whether they are actively serving a broad retail base remain unclear from available public information. Trading outside these licensed platforms remains subject to the original prohibitions.
*   **Continued Risk Warnings:** Even with the pilot program, the underlying concerns about risks (volatility, consumer protection, AML/CFT) that prompted the initial bans persist. In February 2023, the BOL suspended the approval of new loans for cryptocurrency businesses, citing the need to reduce financial risk.

Therefore, while *licensed entities* can operate under strict conditions, the average Lao citizen attempting to buy, sell, or hold cryptocurrencies independently or through unlicensed channels is acting against the explicit directives and warnings issued by the central bank. The activity is not generally permitted or regulated for the retail segment; rather, it is prohibited outside a very narrow, controlled, and licensed framework that may not be readily accessible or intended for widespread retail use.

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**3. Specific Relevant Text Excerpts:**

*   **On Initial Bans/Warnings:**
    *   **(May 2019 - Xinhua):** "The Bank of the Lao People's Democratic Republic has warned Lao commercial banks, businesses and members of the public not to buy, sell or use cryptocurrency for money transactions as this practice is illegal... the Lao central bank has banned the use of these currencies... In its October announcement, the Lao central bank prohibits financial institutions from possessing, engaging in, or encouraging cryptocurrency transactions."
    *   **(August 2018 / March 2021 - CCN.com):** "Laos' central bank has published a notice cautioning the public against cryptocurrency trading and their usage in payments... the Bank of Laos (BOL) said the public is warned against the use of “unregulated” cryptocurrencies... The notice warned against the purchase and sale, or trading of digital assets, talking up the risks in crypto-related investments."
    *   **(May 2019 - Open Development Laos):** "The Bank of the Lao PDR has warned commercial banks, businesses and members of the public not to buy, sell or use cryptocurrency for money transactions as this practice is illegal."

*   **On the Pilot Program and Licensed Exchanges:**
    *   **(August 2023 - IMF):** "The MTC issued Decision No. 888 on November 2021, establishing the main rules for a pilot test of crypto asset activities... The Decision provides a framework for a 3-year pilot program, and sets out two types of crypto business that are allowed to operate under the pilot: crypto mining and crypto trading."
    *   **(January 2022 - Xinhua):** "Lao central bank, the Bank of the Lao PDR (BOL), has issued licenses authorizing two companies to trade in cryptocurrencies. The companies are the Lao Digital Assets Exchange (LDX)... and Bitqik... LDX and Bitqik are now the only licensed and regulated institutions in Laos that can offer full brokerage and trading services in cryptocurrencies..."
    *   **(August 2023 - IMF):** "The development of domestic trading platforms seems largely to absorb crypto from the mining industry and ensure there is a domestic marketplace to exchange and store those crypto assets rather than provide a marketplace for retail users."
    *   **(August 2023 - IMF):** "The Decision also specifically limits the number of crypto trading platforms to be licensed under the pilot to two entities."

*   **On Continued Restrictions/Limited Scope:**
    *   **(February 2023 - Laotian Times):** "The central bank of Laos has issued a notice suspending loans to cryptocurrency business from January this year... Commercial Bank Supervision Department under the central bank will discontinue the consideration of approval for cryptocurrency mining and activities related to cryptocurrencies or similar digital assets."
    *   **(August 2023 - IMF):** "Crypto uptake in Lao P.D.R. seems to be limited so far, and so consumer protection risks appear contained... authorities believe the uptake so far is limited, although there seems to be growing interest. Based on anecdotal evidence, crypto users are younger and more tech-savvy and their numbers are limited."

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**4. Source URLs:**

*   **IMF Technical Assistance Report (August 2023):**
    *   `https://www.elibrary.imf.org/view/journals/002/2023/269/article-A001-en.xml` (Multiple excerpts cited from this comprehensive report)
*   **Xinhua News Agency (January 2022 - Licensing):**
    *   `http://www.news.cn/english/static/2022-01/19/c_1310430375.htm` (Archived/alternative links might be needed if original is unavailable)
*   **Laotian Times (February 2023 - Loan Suspension):**
    *   `https://laotiantimes.com/2023/02/06/bank-of-the-lao-pdr-suspends-loans-for-cryptocurrency-businesses/`
*   **CCN.com (March 2021 - Public Warning):**
    *   `https://www.ccn.com/laos-central-bank-warns-public-against-cryptocurrency-trading/`
*   **Xinhua News Agency (May 2019 - Ban Reiterated):**
    *   `https://english.news.cn/2019-05/21/c_138077121.htm`
*   **Open Development Laos (May 2019 - Warning Summary):**
    *   `https://laos.opendevelopmentmekong.net/news/dont-use-cryptocurrencies-lao-central-bank-warns/`
*   **Legal 500 (Summarizing 2021 Decisions):**
    *   `https://www.legal500.com/developments/thought-leadership/crypto-currency-business-in-laos/`

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**Disclaimer:** Regulatory environments can change. This report reflects the status based on the latest available information referenced up to the date of assessment.