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Montenegro

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#455
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Latest
Created
2025-06-26 13:05
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Executive Summary

Montenegro permits individuals to buy, sell, and hold cryptocurrencies. The most significant regulatory development is the February 2025 amendment to its Anti-Money Laundering (AML) law, introducing a regulatory framework for crypto assets and related services. Providers of crypto asset services must register before commencing operations, with the Capital Market Authority (CMA) managing an online register expected to be established by approximately December 2025. The country aims to align with international standards and foster a crypto-friendly environment, including exploring a central bank digital currency (CBDC).

Key Pillars

The primary regulator is the Capital Market Authority (CMA), tasked with managing the online register of crypto asset service providers. The core compliance requirements include AML/CFT policies, customer due diligence (KYC), and transaction monitoring, as mandated by the amended AML law. Crypto asset service providers are subject to a registration obligation but do not require a permit or licensing.

Landmark Laws

Law on Amendments to the Law on Prevention of Money Laundering and Terrorist Financing: Adopted February 2025, effective March 20, 2025. This law introduces Montenegro's first regulatory framework for crypto assets, crypto asset transactions, and related services, mandating registration for crypto asset service providers.

Considerations

Crypto assets are defined as digital representations of value or rights transferable and stored electronically using DLT. Gains from the sale of cryptocurrencies are generally subject to capital gains tax, and income from mining may be considered business activity subject to income tax. The Central Bank of Montenegro (CBCG) had previously issued warnings about the risks associated with cryptocurrencies. There is some ambiguity during the transitional period until the register is fully operational.

Notes

Montenegro has expressed ambitions to become a hub for digital innovation and is exploring a central bank digital currency (CBDC) through a partnership with Ripple (announced November 2023). A draft of a standalone crypto-specific law had been under consideration since late 2021 but was ultimately integrated into the AML law. Public awareness and understanding of cryptocurrencies and blockchain technology are still considered areas for development. In 2023, the government indicated that activities without a clear legal basis were considered illegal, such as the case of a crypto ATM.

Detailed Explanation

Montenegro has transitioned from an unregulated environment for cryptocurrencies to one that is actively establishing a formal regulatory framework. Individual citizens and residents are permitted to buy, sell, and hold cryptocurrencies. The most significant step in this direction is the amendment to its Anti-Money Laundering (AML) law in February 2025, which introduces a regulatory framework for crypto assets, crypto asset transactions, and related services. This amendment, effective March 20, 2025, aims to align Montenegro with international standards, including recommendations from MONEYVAL and FATF Recommendation 15. The amendment defines crypto assets as digital representations of value or rights that can be transferred and stored electronically using distributed ledger technology (DLT). Prior to these amendments, the crypto space lacked specific legislation, leading to uncertainty for users and businesses. The Central Bank of Montenegro (CBCG) had issued warnings about cryptocurrency risks but acknowledged they did not pose a systemic threat. In 2023, the government considered activities without a clear legal basis as illegal, referencing a crypto ATM case. The new AML law mandates registration for providers of services related to crypto assets, including custody, operating trading platforms, and exchanging crypto for fiat or other crypto assets. Both domestic and foreign entities are subject to this requirement. The Capital Market Authority (CMA) will manage an online, publicly accessible register of all entities offering crypto-related services, expected to be established within nine months of the amendments' entry into force (approximately December 2025). During the transitional period before the register is fully operational, some ambiguity remains. Integrating these regulations within the AML law, rather than enacting a standalone crypto-specific law (which had been under consideration since late 2021), has also been noted. Crypto asset service providers are now under the purview of the AML law, requiring them to implement AML/CFT policies, conduct customer due diligence (KYC), and monitor transactions. The amendments also enhance client identification possibilities, including video-electronic verification. Taxation of cryptocurrency transactions is evolving, with gains from the sale of cryptocurrencies generally subject to capital gains tax, and income from mining potentially considered business activity subject to income tax. However, specific tax guidelines for all crypto transactions are still developing. The Montenegrin government aims to become a hub for digital innovation and has partnered with Ripple to explore a central bank digital currency (CBDC) or national stablecoin, announced in November 2023. Public awareness and understanding of cryptocurrencies and blockchain technology are still considered areas for development, and the authorities continue to monitor the sector.

Summary Points

Retail Trading of Crypto Assets in Montenegro: Regulatory Analysis (June 26, 2025)

Overall Status: Allowed-Regulated

I. Key Regulatory Bodies & Their Roles

  • Central Bank of Montenegro (CBCG):
    • Monitors the crypto sector.
    • Collaborating with Ripple to explore a Central Bank Digital Currency (CBDC) or national stablecoin.
    • Previously issued warnings about crypto risks.
  • Capital Market Authority (CMA):
    • Tasked with managing an online, publicly accessible register of all entities offering crypto-related services.
    • Register expected to be established by approximately December 2025.

II. Key Legislation & Regulations

  • Law on Prevention of Money Laundering and Terrorist Financing (AML Law):
    • Amended in February 2025 (effective March 20, 2025).
    • Introduces the first regulatory framework for crypto assets, crypto asset transactions, and related services.
    • Aims to align Montenegro with international standards (MONEYVAL, FATF Recommendation 15).
    • Defines crypto assets as digital representations of value or rights transferable and stored electronically using DLT or similar systems.

III. Requirements for Compliance

  • Registration Obligation:
    • Providers of crypto asset services (domestic and foreign) must register before commencing operations.
    • Applies to services including custody, operating trading platforms, and exchanging crypto for fiat or other crypto assets.
  • AML/CFT Compliance:
    • Crypto asset service providers must implement AML/CFT policies.
    • Required to conduct customer due diligence (KYC).
    • Must monitor transactions for suspicious activity.
    • Enhanced client identification possibilities, including video-electronic verification.

IV. Notable Restrictions or Limitations

  • Transitional Period Ambiguity:
    • Uncertainty exists during the transitional period until the Register of Crypto Asset Service Providers is fully operational (expected by December 2025).
  • Lack of Specific Crypto Law:
    • Regulations integrated within the AML law, rather than enacting a standalone crypto-specific law (draft under consideration since late 2021).

V. Taxation

  • Capital Gains Tax:
    • Gains from the sale of cryptocurrencies are generally subject to capital gains tax.
  • Income Tax:
    • Income from mining may be considered business activity subject to income tax.
  • Developing Guidelines:
    • Specific, comprehensive tax guidelines for all types of crypto transactions are still developing.

VI. Recent Developments & Changes

  • February 2025 AML Law Amendments: Significant step towards regulation, introducing a framework for crypto assets and related services.
  • Partnership with Ripple: Exploring a central bank digital currency (CBDC) or national stablecoin.
  • Government Ambitions: Expressed ambitions to become a hub for digital innovation and foster a crypto-friendly environment.

VII. Ongoing Considerations

  • Public Awareness: Public awareness and understanding of cryptocurrencies and blockchain technology are still areas for development.

Full Analysis Report

Retail_Trading_Status in Montenegro

Report Date: 2025-06-26

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. Current Status:

Allowed-Regulated

2. Detailed Narrative Explanation:

Montenegro has been actively working to establish a regulatory framework for cryptocurrencies, moving from a previously unregulated or "gray-zone" environment towards a more formalized approach. Individual citizens and residents are permitted to buy, sell, and hold cryptocurrencies. The most significant recent development is the amendment to its Anti-Money Laundering (AML) law in February 2025, which, for the first time, introduces a regulatory framework for crypto assets, crypto asset transactions, and related services. This move aims to align Montenegro with international standards, including recommendations from MONEYVAL and FATF Recommendation 15.

Historically, the crypto space in Montenegro was characterized by a lack of specific legislation. While not explicitly banned, the absence of clear rules created uncertainty for both users and businesses. The Central Bank of Montenegro (CBCG) had previously issued warnings about the risks associated with cryptocurrencies, though it also acknowledged that they did not pose a systemic threat to the local banking system. There were instances where the government indicated that activities without a clear legal basis were considered illegal, such as the case of a crypto ATM in 2023.

The new amendments to the AML law, effective March 20, 2025, now define crypto assets and detail a range of services associated with them, including custody, operating trading platforms, and exchanging crypto for fiat or other crypto assets. A key requirement introduced is the mandatory registration for providers of services related to crypto assets before they can commence operations in Montenegro. This registration obligation applies to domestic and foreign entities. The Capital Market Authority (CMA) is tasked with managing an online, publicly accessible register of all entities offering crypto-related services, which is expected to be established within nine months of the amendments' entry into force (i.e., by approximately December 2025).

While these amendments represent a significant step towards regulation, some ambiguity remains during the transitional period until the register is fully operational. The decision to integrate these regulations within the AML law, rather than enacting a standalone crypto-specific law (a draft of which had been under consideration since late 2021), has also been noted.

Regarding Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements, the amended AML law clearly brings crypto asset service providers under its purview. These platforms are expected to implement AML/CFT policies, conduct customer due diligence, and monitor transactions. The amendments also enhance client identification possibilities, including video-electronic verification.

Taxation of cryptocurrency transactions is also an evolving area. Gains from the sale of cryptocurrencies are generally subject to capital gains tax, and income from mining may be considered business activity subject to income tax. However, specific, comprehensive tax guidelines for all types of crypto transactions are still developing.

The Montenegrin government has expressed ambitions to become a hub for digital innovation and has shown interest in fostering a crypto-friendly environment, including a partnership with Ripple to explore a central bank digital currency (CBDC) or national stablecoin. This proactive stance, coupled with the new regulatory measures, indicates a move towards a more structured and supervised retail crypto trading environment.

Despite these advancements, public awareness and understanding of cryptocurrencies and blockchain technology are still considered areas for development. The authorities, including the Central Bank and the Capital Market Authority, continue to monitor the sector.

3. Specific, Relevant Text Excerpts:

  • Karanovic & Partners (March 2025): "The Parliament of Montenegro has adopted amendments to its Anti Money Laundering (“AML”) law on 28 February 2025... A key element of the changes is the introduction of Montenegro's first-ever regulatory framework for crypto assets, crypto asset transactions, and related services... Under the amendments, crypto assets are defined as digital representations of value or rights that can be transferred and stored electronically using distributed ledger technology (DLT) or similar systems... The provision of crypto assets services does not require any permit or licensing, there is only a registration obligation, which is primarily a formal procedure. The Capital Market Commission will manage an online register of all entities offering crypto-related services."
  • CEE Legal Matters (March 17, 2025): "The Law on Amendments to the Law on Prevention of Money Laundering and Terrorist Financing ("Law") has been adopted... and it enters into force on 20th March 2025... The new provisions include an obligation for providers of services related to crypto assets in Montenegro to register before commencing operations."
  • JPM & Partners (undated, referencing March 20, 2025 effective date): "Montenegro has adopted amendments to its Law on Prevention of Money Laundering and Terrorist Financing, effective 20 March 2025, introducing stricter regulations for crypto assets... Crypto asset service providers must now register before operating, though transitional provisions are absent, creating uncertainty until the Register of Crypto Asset Service Providers is established within nine months."
  • UPay Blog (November 28, 2024): "Montenegro is at a crossroads when it comes to cryptocurrency regulation, as the country has yet to establish specific laws for digital assets. In the absence of dedicated cryptocurrency legislation, Montenegro may apply existing regulations to crypto transactions. Measures like anti-money laundering (AML) and know-your-customer (KYC) protocols could be introduced, to mitigate potential risks." (Note: This was prior to the Feb 2025 AML law amendments but reflects the ongoing development).
  • Prifinance (undated, likely late 2023 or early 2024): "There is no clear regulation of the crypto-field and a direct ban on the non-fiat funds' exchange and circulation in the state. However, even though a license for cryptocurrencies is not issued, exchanges and exchangers should adhere to the rules adopted in the country and in Europe... Therefore, crypto platforms should: ... take care of the implementation of AML legislation (this is a Pan-European rule for recipients of licenses for the cryptocurrency exchange) – the company must have policies to counter money laundering and terrorist financing, internal control rules, technical means of suspicious transactions tracking, etc.; ... prepare the basis for fulfilling KYC requirements for the personality identifying data disclosure..."
  • Heavnn University (March 27, 2024): "Montenegro's tax regime for cryptocurrencies is still evolving, but the country has taken steps to clarify the tax treatment of these digital assets. Cryptocurrencies are classified as property under Montenegrin tax law, and various types of cryptocurrency transactions are subject to different tax treatments... Gains from the sale of cryptocurrencies are subject to capital gains tax... Mining cryptocurrencies is considered a business activity and is subject to income tax."
  • Central Bank of Montenegro (November 4, 2023): "The Central Bank of Montenegro (CBCG) has agreed to collaborate with the enterprise crypto and blockchain solutions provider Ripple to develop a strategy and pilot program to launch the country’s first digital currency in the form of a Central Bank Digital Currency (CBDC) or national stable coin."

4. Direct, Accessible URL Links to Sources:

  1. UPay Blog (Crypto Adoption Around the World: Montenegro - November 28, 2024): https://upay.co.uk/blog/crypto-adoption-around-the-world-montenegro (Archived version if original is altered: No direct archive link, original URL provided)
  2. Regulaceo (Crypto License in Montenegro - May 10, 2023): https://regulaceo.com/crypto-license-in-montenegro/ (Archived version if original is altered: No direct archive link, original URL provided)
  3. Prifinance (Crypto Exchange License in Montenegro under VASP Regulation - Undated): https://prifinance.com/en/montenegro/fintech-licensing/cryptocurrency-exchange-license-in-montenegro-under-vasp-regulation/ (Archived version if original is altered: No direct archive link, original URL provided)
  4. Karanovic & Partners (Montenegro’s First-Ever Crypto Regulation - March 2025): https://www.karanovicpartners.com/news/montenegros-first-ever-crypto-regulation/ (Archived version if original is altered: No direct archive link, original URL provided)
  5. Heavnn University (Cryptocurrency Taxes in Montenegro - March 27, 2024): https://heavnn.university/blog/cryptocurrency-taxes-in-montenegro (Archived version if original is altered: No direct archive link, original URL provided)
  6. JPM & Partners (Montenegro Updates AML Laws for Crypto Regulation - Undated, references March 20, 2025 effective date): https://www.jpm.rs/montenegro-updates-aml-laws-for-crypto-regulation/ (Archived version if original is altered: No direct archive link, original URL provided)
  7. Freeman Law (Montenegro and Cryptocurrency - Undated): https://freemanlaw.com/international-cryptocurrency-regulation/montenegro-cryptocurrency-laws/ (Archived version if original is altered: No direct archive link, original URL provided)
  8. Time.news / Radio Free Europe (Montenegro: Crypto paradise announced - January 19, 2024): https://time.news/montenegro-crypto-paradise-announced/ (Archived version if original is altered: No direct archive link, original URL provided)
  9. Legal Floricel (Top Crypto-Friendly Jurisdictions in Eastern Europe: Legal Guide 2025 - April 23, 2025): https://legalfloricel.com/top-crypto-friendly-jurisdictions-in-eastern-europe-legal-guide-2025/#montenegro (Archived version if original is altered: No direct archive link, original URL provided)
  10. Central Bank of Montenegro (CBCG Signs Agreement with Ripple - November 4, 2023): https://www.cbcg.me/en/public-relations/news/press-releases/central-bank-of-montenegro-signs-agreement-with-ripple-to-develop-a-digital-currency-strategy-and-pilot?id=2243 (Archived version if original is altered: No direct archive link, original URL provided)
  11. Government of Montenegro (Minister Damjanović: Proper and transparent regulation of cryptocurrencies in Montenegro - September 27, 2023): https://www.gov.me/en/article/minister-damjanovic-proper-and-transparent-regulation-of-cryptocurrencies-in-montenegro (Archived content notice on page)
  12. Radio Free Europe (Montenegro's Crypto Dream Is Hanging In The Balance - January 31, 2024): https://www.rferl.org/a/montenegro-crypto-hub-ethereum-spajic/32799868.html (Archived version if original is altered: No direct archive link, original URL provided)
  13. Global Initiative Against Transnational Organized Crime (Montenegro’s bid for crypto kudos heralds risks - December 17, 2023): https://globalinitiative.net/analysis/montenegro-crypto-risk-bulletin-17/ (Archived version if original is altered: No direct archive link, original URL provided)
  14. CEE Legal Matters (Montenegro: Regulation of Business Operations Related to Crypto Assets Through Amendments to the Law on Prevention of Money Laundering and Terrorist Financing - March 17, 2025): https://ceelegalmatters.com/montenegro/27681-montenegro-regulation-of-business-operations-related-to-crypto-assets-through-amendments-to-the-law-on-prevention-of-money-laundering-and-terrorist-financing (Archived version if original is altered: No direct archive link, original URL provided)
  15. Central Bank of Montenegro (Round Table “Development of Montenegro’s Capital and Financial Market” Held - May 5, 2022): https://www.cbcg.me/en/public-relations/news/press-releases/round-table-development-of-montenegros-capital-and-financial-market-held?id=1910 (Archived version if original is altered: No direct archive link, original URL provided)
  16. IOSCO (Investor Alerts - Exen Market LTD, referencing Capital Market Authority of Montenegro - October 19, 2023): https://www.iosco.org/investor_protection/?subsection=investor_alerts_portal&show_id=9813&show_id=9813 (Archived version if original is altered: No direct archive link, original URL provided)
  17. bne IntelliNews (Montenegro launches cryptocurrency pilot project with US Ripple - January 30, 2023): https://www.intellinews.com/montenegro-launches-cryptocurrency-pilot-project-with-us-ripple-268600/ (Archived version if original is altered: No direct archive link, original URL provided)

Web Sources (17)

Sources discovered via web search grounding

Search queries used (7)
  • Montenegro cryptocurrency regulation retail
  • Central Bank of Montenegro cryptocurrency stance
  • Montenegro Capital Market Authority cryptocurrency
  • Are citizens in Montenegro allowed to trade cryptocurrencies?
  • KYC/AML regulations for cryptocurrency platforms in Montenegro
  • Official statements Montenegro cryptocurrency trading
  • Legal status of Bitcoin and other cryptocurrencies in Montenegro
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