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Belize

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#484
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Latest
Created
2025-06-26 13:14
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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

Report on the Current Status of Retail Cryptocurrency Trading in Belize

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. Identified Current Status:

Gray-Zone

2. Detailed Narrative Explanation:

The status of retail cryptocurrency trading in Belize is best described as a "Gray-Zone" due to a combination of factors: the absence of specific legislation explicitly permitting or regulating retail crypto trading for individuals, coupled with recent restrictive measures on virtual asset service providers (VASPs) and a general cautionary stance from regulatory bodies.

Historically, Belize has not had specific laws addressing cryptocurrencies. Trading businesses in Belize are generally regulated by the Financial Services Commission (FSC), but the FSC has not historically issued licenses for cryptocurrency exchanges. In February 2019, the IFSC (now the FSC) issued a public statement clarifying that it does not regulate or license trading in virtual currencies and warned the public about the substantial risks involved. It also noted that virtual currencies are not legal tender in Belize.

More recently, the regulatory landscape has become more defined, albeit restrictive for service providers. The Financial Services Commission Act, Act No. 8 of 2023 (FSC Act), which commenced on April 15, 2023, significantly impacts virtual asset activities. Section 81 of this Act prohibits any person from carrying on virtual asset activities in or from within Belize without a license. These activities include the exchange between virtual assets and fiat currencies, transfer of virtual assets, and custody or administration of virtual assets. Crucially, the FSC has stated that "until the 31st day of December 2025, the FSC will not issue any licenses for these virtual asset activities." Persons conducting such businesses before the Act's commencement were required to notify the FSC and cease operations by July 15, 2023. Failure to comply can lead to criminal sanctions.

While these regulations directly target businesses providing virtual asset services, they indirectly affect retail traders by limiting their access to locally regulated platforms. The FSC has explicitly stated that "Belize currently has no legal framework for virtual assets, inclusive of Crypto-currency – as such the FSC has not issued a law, regulations, or guidelines for these types of activities" for the general public's direct participation, beyond the VASP licensing prohibition.

Despite the lack of specific regulations for individual retail trading and the current prohibition on VASP licensing, cryptocurrencies are not explicitly banned for individuals to hold or trade peer-to-peer. Some sources suggest that crypto adoption in Belize is legal, and the government emphasizes Know Your Customer (KYC) and Anti-Money Laundering (AML) measures, even without specific crypto regulations for individuals. However, this "legality" seems to exist in a vacuum of direct regulation for individuals, rather than explicit permission. The Central Bank of Belize has also highlighted the FSC's restrictions on virtual asset activities and the definition of virtual assets under the FSC Act.

The government appears to be taking a cautious "wait and see" approach, observing how more developed countries handle cryptocurrency regulation. Belize has also joined international efforts like the Crypto-Asset Reporting Framework (CARF) to ensure tax compliance and combat tax evasion related to crypto assets, with an aim to implement it into domestic law by 2027. This indicates an awareness and an intention to eventually establish a clearer regulatory framework.

AML/CFT (Anti-Money Laundering/Countering the Financing of Terrorism) concerns are prominent. Belize has conducted risk assessments on VASPs, leading to the current prohibition on their licensing until December 31, 2025. The Money Laundering and Terrorism (Prevention) Act is a key piece of legislation that crypto-related businesses (if they were to be licensed) would need to adhere to, including full client verification requirements.

Therefore, while individuals are not explicitly prohibited by law from buying, selling, or holding cryptocurrencies through offshore platforms or peer-to-peer transactions, the lack of a clear regulatory framework for such activities, the current ban on local VASP licensing, and the cautionary stance of regulators place retail trading in a "Gray-Zone." There are no licensed local exchanges, and individuals engaging with cryptocurrencies do so without specific legal protections or a clear set of rules governing their activities, relying on general laws and the evolving international regulatory landscape.

3. Specific, Relevant Text Excerpts:

  • Financial Services Commission (FSC) of Belize (via Central Bank of Belize Notice, June 2023, referencing FSC Act 2023): "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."
  • Financial Services Commission (FSC) of Belize (via Central Bank of Belize Notice, June 2023, referencing FSC Act 2023): "Section 81 (3) of the FSC Act stipulates that no licenses for virtual assets activities will be issued on or before 31 December 2025."
  • Financial Services Commission (FSC) of Belize (Public Notice FSC/2/PN/012, as reported by various sources): "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. Moreover, until the 31st day of December 2025, the FSC will not issue any licenses for these virtual asset activities."
  • Breaking Belize News (quoting an FSC notice, November 2023): "Belize currently has no legal framework for virtual assets, inclusive of Crypto-currency – as such the FSC has not issued a law, regulations, or guidelines for these types of activities.”
  • Proelium Law LLP (Cryptocurrency Regulation Tracker): "BELIZE. Undecided. Cryptocurrencies are legal, although there is no specific regulation dealing with cryptocurrency. Trading businesses in Belize are regulated by the International Financial Services Commission of Belize. The Commission does not appear to issue licenses for companies to engage in cryptocurrency exchanges." (Note: This "Undecided" status and parts of the explanation predate the full implications of the FSC Act 2023 becoming widely reported, particularly the moratorium on VASP licenses).
  • UPay Blog (December 2024 - likely a typo for 2023 or refers to content validity): "Adoption Status: Crypto Adoption in Belize is legal, and the government gives importance to Know Your Customer (KYC) and Anti Money Laundering (AML), even though there are no specific regulations." And "Until now, Belize has been crafting laws to govern early-stage cryptocurrencies. The government is watching these changes and passing laws based on international ones. However, cryptocurrencies still lack full legalization."
  • International Financial Services Commission (Public Statement, February 2019): "The global regulatory landscape with respect to the virtual currencies remains unsettled and, as in most jurisdictions, the IFSC does not regulate or license trading in virtual currencies. Therefore, the public will have no regulatory recourse or safeguard for losses as a result of investments in virtual currencies and will not be able to rely on any protection afforded under legislation administered by IFSC."
  • CFATF Mutual Evaluation Report (December 2024, adopted): "Additionally, Belize has conducted two risk assessments on cryptocurrency/ Virtual Asset Services Providers (VASPs) resulting in the prohibition of VASPs until December 31st, 2025."

4. Direct, Accessible URL Links to Specific Sources:

Web Sources (12)

Sources discovered via web search grounding

Search queries used (8)
  • Belize cryptocurrency regulation retail trading
  • Belize crypto laws for individuals
  • Central Bank of Belize cryptocurrency policy
  • Financial Services Commission Belize cryptocurrency
  • Belize AML/KYC cryptocurrency
  • Is cryptocurrency trading legal in Belize for citizens?
  • Belize official statements on cryptocurrency trading
  • Belize crypto exchange licensing
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