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Djibouti

Retail_Trading_Status

Gray-Zone Unknown
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Status Changed

Previous status: Unclear

The primary difference between the two analyses lies in the "Current Status" assigned to retail cryptocurrency trading in Djibouti and the nuance in the narrative explaining this status. The previous analysis concluded with "Unclear," while the new analysis determines it as "Allowed-Unregulated." Justification for the differences: 1. **Interpretation of Regulatory Silence:** * The **Previous Analysis** leaned towards "Unclear" because of the definitive lack of specific legislation or explicit authorization. It highlighted the "regulatory gray area," emphasizing that while not outright banned, there was no formal legal standing or endorsement. The focus was on the absence of a clear "yes" from authorities. * The **New Analysis** interprets this same regulatory silence differently. By labeling the status "Allowed-Unregulated," it emphasizes that in the absence of an explicit prohibition, the activity is de facto permitted for individuals. The "Allowed" part stems from the lack of a ban, and "Unregulated" accurately reflects the absence of specific crypto laws, licensing, or tailored oversight. This is a more assertive interpretation of the existing legal vacuum. 2. **Emphasis on "Not Prohibited" vs. "Not Explicitly Permitted":** * The **Previous Analysis** acknowledged that purchasing and selling were "not prohibited" [Source 2] but framed this within the context of crypto not being legal tender and the Central Bank not authorizing its use. This created an overall sense of uncertainty. * The **New Analysis** gives more weight to the "not prohibited" aspect. It takes the absence of a ban as a stronger indicator of permissibility for individuals, even if the broader financial system doesn't formally recognize or regulate crypto-assets. The fact that international exchanges offer services to Djiboutians further supports this "Allowed" aspect. 3. **Evolution of Terminology and Precision:** * "Unclear" is a broad term that can signify a genuine lack of information or a high degree of ambiguity where the legality is truly unknown. * "Allowed-Unregulated" is a more precise and descriptive status. It clarifies two distinct points: individuals are generally not prevented from trading (Allowed), but there are no specific rules, protections, or licensing frameworks governing this activity (Unregulated). This provides a clearer picture of the operational reality for retail traders. 4. **Influence of Supporting Sources and their Interpretation:** * Both analyses use similar foundational information, such as the Proelium Law LLP (or equivalent Vertex AI summary) statement about "No legal status" and government plans for regulation, and the Smile ID information on general AML/CFT frameworks. * The **New Analysis** seems to integrate sources like UEEx Technology more directly to support the "Allowed" aspect. For instance, UEEx stating, "There are no specific regulations governing crypto trading, you should be aware of potential risks and ensure they trade on reputable exchanges," implies that trading can occur, albeit with caution. The mention of Djibouti "steadily embracing digital assets" also points towards a more permissive environment than strictly "Unclear." * The Invezz source, present in both reports ("Yes, buying Bitcoin is legal in Djibouti"), more directly supports the "Allowed" conclusion of the new analysis. While noted in the previous report, its impact might have been tempered by the overall emphasis on the lack of formal regulation. 5. **Confirmation of Continued Status Quo on Regulation:** * The **New Analysis** includes a more recent IMF statement (June 2025) which, while focusing on broader AML/CFT and financial reforms, implicitly confirms that specific cryptocurrency regulations have not yet been implemented. This reinforces the "Unregulated" part of the status, showing that despite ongoing financial system attention, crypto remains outside a dedicated framework. In summary, the shift from "Unclear" to "Allowed-Unregulated" is not based on a fundamental change in Djibouti's laws regarding cryptocurrency (as none specific have been introduced or removed). Instead, it reflects a more nuanced and definitive interpretation of the existing situation. The new analysis concludes that the absence of a ban, coupled with the availability of trading platforms, means individuals are practically allowed to trade, while concurrently and accurately highlighting the significant risks and lack of specific protections due to the unregulated nature of the activity. The core evidence about the lack of specific laws, the non-legal tender status, and the applicability of general AML/CFT laws remains consistent across both reports. The change is in the resulting classification of this state of affairs.

Analysis ID
#546
Version
Latest
Created
2025-06-26 13:24
Workflow Stage
Live

Executive Summary

As of June 2025, Djibouti operates within a "Gray-Zone" regarding retail crypto trading regulations. There is no explicit legal framework that either permits or restricts the use, trading, or mining of cryptocurrencies. Consequently, there is no dedicated licensing framework for crypto entities nor a specific consumer protection regime for crypto traders. Any entities engaged in handling cryptocurrencies are currently subject to the country's generic Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) laws. Despite earlier discussions, such as a 2022 announcement about potentially licensing crypto exchanges, these proposals have not yet translated into formal regulations, and there are no indications of new implementation steps as of the current date.

Key Pillars

  • The regulatory landscape for cryptocurrencies in Djibouti is characterized by the absence of specific crypto-centric legislation. Instead, the existing financial oversight relies heavily on general financial laws, particularly those pertaining to AML/CFT. The Central Bank of Djibouti (Banque Centrale de Djibouti - BCD) serves as the primary regulatory body overseeing the country's banking system and financial institutions. While the BCD ensures the stability of the banking sector and monitors currency exchange, its regulatory scope has not been explicitly extended to cover cryptocurrency activities with specific rules. Financial institutions are required to conduct due diligence and report suspicious transactions under the AML framework.

Landmark Laws

Law No. 119/AN/11/6th L of 22 January 2011 on the establishment and supervision of credit institutions and financial auxiliaries
- Authority: Central Bank of Djibouti
- Date: 22 January 2011
- Summary: This law, regulated by the Central Bank of Djibouti, governs money transfer and foreign exchange activities, stipulating that such services can only be exercised by a financial auxiliary or a credit institution. While not directly about crypto, it establishes the general framework for financial services providers.

Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Framework
- Authority: Financial Action Task Force (FATF) guidance, Middle East & North Africa Financial Action Task Force (MENAFATF) assessment
- Date: Ongoing; Last assessed 2024
- Summary: Djibouti has implemented an AML framework in line with international standards, particularly under the guidance of the Financial Action Task Force (FATF). This framework requires financial institutions to conduct due diligence, report suspicious transactions, and take steps to prevent money laundering and terrorist financing. The country's measures to combat money laundering and terrorist financing were last assessed by the Middle East & North Africa Financial Action Task Force (MENAFATF) in 2024. Improvements to the AML/CFT framework are crucial, with ongoing efforts to ensure the passage of draft legal amendments to AML/CFT laws.

Digital Code
- Authority: National Assembly
- Date: Approved June 30, 2025
- Summary: Although primarily focused on electronic communications, electronic tools, e-commerce, personal data protection, cybersecurity, and cybercrime, the recently approved Digital Code by the National Assembly aims to integrate provisions applicable to the digital sector into a single, coherent framework. While it provides a legal framework for dematerialized transactions and aims to strengthen public trust in Information and Communication Technology (ICT) services, it does not specifically address cryptocurrency regulation.

Considerations

  • Asset Classification: There is no specific legal classification for cryptocurrencies in Djibouti. They are not recognized as legal tender.

  • Taxation: There is no clear framework for cryptocurrency taxation, creating uncertainty for individuals and businesses regarding tax reporting. Djibouti does have a corporate income tax rate of 25% and a Value Added Tax (VAT) rate of 10% on most goods and services, but how these apply to crypto assets is not defined.

  • Consumer Protection: As of June 2025, a specific consumer protection regime for crypto traders is absent. The government has, however, issued warnings to citizens about the risks associated with crypto trading, highlighting instances of financial losses.

  • Regulatory Perimeter: The application of existing financial laws to crypto activities is largely through the lens of preventing illicit activities such as money laundering and tax evasion.

  • Technological Infrastructure: Djibouti's technological infrastructure, including internet penetration (only about 26% of the population has access to formal banking services), may pose limitations for widespread adoption and sophisticated regulation of digital financial services like crypto.

Notes

  • Earlier reports from 2022 indicated that Djibouti's government was considering plans to regulate and license crypto exchanges. However, these plans have not materialized into formal regulations as of June 2025. While the government has expressed interest in blockchain technology, it maintains a cautious approach, acknowledging both the potential benefits, such as reducing remittance costs, and the investment risks. The Central Bank of Djibouti appears open to working with crypto businesses despite the lack of a defined regulatory framework. Ongoing efforts are focused on strengthening the broader AML/CFT framework, including reviewing legal amendments and planning a new national risk assessment for 2024-2025, which may indirectly influence the crypto landscape. The country's aspiration to be a regional financial hub and its relatively open foreign exchange regime could potentially drive future crypto regulatory developments.

Detailed Explanation

Djibouti's approach to retail crypto trading, as of June 2025, can be definitively classified as a "Gray-Zone." This status stems from the complete absence of explicit legal permissions or restrictions governing the use, exchange, or mining of cryptocurrencies within the country. Unlike jurisdictions with clear regulatory frameworks, Djibouti has not established a specific licensing regime for crypto exchanges or other virtual asset service providers, nor has it put in place dedicated consumer protection measures for individuals engaging in crypto trading. This means that retail crypto traders operate in an environment devoid of tailored legal safeguards or specific operational guidelines for crypto businesses. In the absence of crypto-specific laws, any entities involved in cryptocurrency activities are implicitly governed by Djibouti's generic Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) laws. These laws mandate financial institutions to undertake due diligence and report suspicious transactions, aligning with international standards set by bodies like the FATF. The Central Bank of Djibouti (BCD), as the primary financial regulator, oversees the traditional banking sector and related financial services, including money transfers and foreign exchange. However, its existing legal powers and regulatory scope has not been explicitly expanded or adapted to directly address the unique characteristics and risks associated with cryptocurrencies. A significant point highlighted by reviewers is that earlier discussions and announcements, particularly from 2022, regarding the potential for licensing crypto exchanges in Djibouti, have not progressed into tangible regulations. As of June 2025, there is no evidence of these proposals moving towards formal implementation. This suggests a continued cautious or perhaps deferred approach to specific crypto regulation. While there's an acknowledgment of crypto's existence—evidenced by the presence of global crypto exchanges like Binance, Kraken, and Bitfinex serving the Djiboutian market and the government's warnings about crypto risks—this has not translated into a defined legal status for these digital assets or a clear tax regime. Consequently, individuals and businesses remain uncertain about the tax implications of crypto transactions. Djibouti's broader financial reform efforts, which include modernizing the financial sector through measures like updated banking regulations and a recently approved Digital Code focused on electronic communications and e-commerce, aim to enhance transparency and encourage investment. Yet, these initiatives have not directly addressed cryptocurrency. The country's ambition to become a regional financial hub, coupled with its stable currency pegged to the US dollar and relatively open foreign exchange regime, indicates a potential future for digital finance. However, for retail crypto trading, the current landscape remains one of ambiguity, relying on general financial crime laws rather than comprehensive, bespoke regulatory oversight.

Summary Points

Here's the detailed regulatory analysis report on Retail Crypto Trading in Djibouti converted into a clear, scannable bullet point format:

## Retail Crypto Trading Regulations in Djibouti: Key Insights (June 2025)

### 1. Regulatory Status

  • "Gray-Zone" Classification:
  • No explicit legal framework either permitting or restricting the use, trading, or mining of cryptocurrencies.
  • This means there's no dedicated licensing framework for crypto entities.
  • No specific consumer protection regime for crypto traders.
  • Default Regulation: Any entities engaged in handling cryptocurrencies are currently subject to the country's generic Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) laws.
  • Stalled Proposals: Earlier discussions (e.g., 2022 announcements about potentially licensing crypto exchanges) have not translated into formal regulations as of June 2025.

### 2. Key Regulatory Bodies and Their Roles

  • Central Bank of Djibouti (Banque Centrale de Djibouti - BCD):
  • Primary regulatory body overseeing the country's banking system and financial institutions.
  • Ensures the stability of the banking sector and monitors currency exchange.
  • Limited Crypto Scope: Its regulatory scope has not been explicitly extended to cover cryptocurrency activities with specific rules.
  • Financial Institutions:
  • Required to conduct due diligence and report suspicious transactions under the existing AML/CFT framework.

### 3. Important Legislation and Regulations

  • Absence of Crypto-Specific Laws: Djibouti does not possess any landmark legislation specifically targeting cryptocurrencies.
  • Broader Financial Laws Apply:
  • Law No. 119/AN/11/6th L of 22 January 2011:
  • Governs the establishment and supervision of credit institutions and financial auxiliaries.
  • Regulates money transfer and foreign exchange activities.
  • Establishes the general framework for financial service providers, indirectly affecting any crypto-related financial services.
  • Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Framework:
  • Implemented in line with international standards (e.g., Financial Action Task Force - FATF).
  • Requires financial institutions to conduct due diligence, report suspicious transactions, and prevent illicit financing.
  • Last assessed by the MENAFATF in 2024; ongoing efforts to pass draft legal amendments.
  • Digital Code (Approved June 30, 2025):
  • Primarily focuses on electronic communications, e-commerce, personal data protection, cybersecurity, and cybercrime.
  • Aims to integrate provisions for the digital sector and strengthen public trust in ICT services.
  • Does NOT specifically address cryptocurrency regulation.

### 4. Requirements for Compliance

  • AML/CFT Adherence: Any entities involved in cryptocurrency activities are implicitly required to comply with the general AML/CFT framework.
  • Due Diligence: Financial institutions (and implicitly, any crypto-related entities operating as such) must conduct customer due diligence.
  • Suspicious Transaction Reporting (STR): Obligation to report suspicious transactions to relevant authorities.

### 5. Notable Restrictions or Limitations

  • No Legal Tender Status: Cryptocurrencies are not recognized as legal tender in Djibouti.
  • No Specific Consumer Protection: A dedicated consumer protection regime for crypto traders is absent.
  • Regulatory Perimeter: Existing financial laws apply primarily through the lens of preventing illicit activities (e.g., money laundering, tax evasion), rather than comprehensive crypto oversight.
  • Technological Infrastructure: Limited internet penetration (approx. 26% of the population has access to formal banking services) may pose limitations for widespread adoption and sophisticated regulation of digital financial services.

### 6. Recent Developments or Changes

  • Stalled Regulatory Plans: Earlier government considerations (from 2022) to regulate and license crypto exchanges have not materialized into formal regulations as of June 2025.
  • Cautious Approach: The government maintains a cautious approach, acknowledging both potential benefits (e.g., reducing remittance costs) and investment risks.
  • Central Bank Openness: The Central Bank of Djibouti appears open to working with crypto businesses despite the lack of a defined regulatory framework.
  • Ongoing AML/CFT Strengthening: Efforts include reviewing legal amendments and planning a new national risk assessment for 2024-2025, which may indirectly influence the crypto landscape.
  • Government Warnings: The government has issued warnings to citizens about the risks associated with crypto trading, highlighting instances of financial losses.
  • Market Presence: Global crypto exchanges (e.g., Binance, Kraken, Bitfinex) currently serve the Djiboutian market.

### 7. Important Considerations for Crypto Activities

  • Asset Classification: There is no specific legal classification for cryptocurrencies.
  • Taxation: No clear framework for cryptocurrency taxation, creating uncertainty for individuals and businesses regarding tax reporting.
  • Future Potential: Djibouti's aspiration to be a regional financial hub, coupled with its stable currency (pegged to the US dollar) and relatively open foreign exchange regime, could potentially drive future crypto regulatory developments.

Full Analysis Report

Report on Retail Cryptocurrency Trading Status in Djibouti

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).

Retail_Trading_Status in Djibouti

Identified Status: Allowed-Unregulated

Detailed Narrative Explanation:

As of June 2025, retail cryptocurrency trading in Djibouti is considered "Allowed-Unregulated". This means that while individual citizens and residents are not explicitly prohibited from buying, selling, and holding cryptocurrencies, there are no specific laws or regulations dedicated to governing this activity. The government has not issued a definitive legal status for cryptocurrencies.

There is no specific licensing regime for cryptocurrency exchanges or platforms operating in Djibouti, nor are there crypto-focused tax rules. While general commercial and financial laws may apply, the cryptocurrency sector itself operates without a tailored regulatory framework. Some sources indicate that while there are no specific regulations for crypto trading, individuals should be aware of potential risks and ensure they use reputable exchanges.

It's important to note that Djibouti has been taking steps to strengthen its broader Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) framework. The Central Bank of Djibouti (BCD) and the Financial Intelligence Unit (CRF - Cellule de Renseignement Financier) are the key regulators for AML/KYC in the country, with the primary legislation being "Dispositif De Prévention Du Blanchiment De Capitaux Et Du Financement Des Activites Terroristes' instruction No. 2017-02". While these regulations apply to financial activities in general, their specific application or enforcement concerning cryptocurrency-related activities by individuals or platforms remains undefined due to the lack of crypto-specific laws.

There have been mentions of the government planning to regulate cryptocurrency in the past, but as of the latest available information, this has not yet materialized into concrete regulations. The focus of recent financial reforms, as highlighted by an IMF mission in June 2025, has been on strengthening the currency board, enhancing the Central Bank's autonomy, improving SOE governance, and reforming the AML/CFT framework under MENAFATF's enhanced monitoring. These broader financial system reforms do not yet specifically address the nuances of retail cryptocurrency trading.

Several international cryptocurrency exchanges and brokerage platforms list Djibouti as a country where their services are available, further suggesting the absence of an outright ban. However, these platforms often highlight the general need for users to be aware of their local laws, which in Djibouti's case, lack specific provisions for cryptocurrencies.

Therefore, individuals engaging in cryptocurrency trading in Djibouti do so in an environment that is not explicitly prohibitive but also lacks specific regulatory oversight, investor protection measures, or clear guidelines tailored to digital assets.

Specific, Relevant Text Excerpts:

  • Proelium Law LLP (Vertex AI Search): "Djibouti. Undecided. No legal status for cryptocurrencies. There is no cryptocurrency regulation, however, the government has announced plans to regulate cryptocurrency."
  • UEEx Technology (Vertex AI Search): "(2025-04-22) 1. Is cryptocurrency legal in Djibouti? There are no specific regulations governing crypto trading, you should be aware of potential risks and ensure they trade on reputable exchanges."
  • UEEx Technology (Vertex AI Search): "(2025-04-22) Djibouti is steadily embracing digital assets and establishing itself as an emerging hub in the digital economy. As the demand for crypto continues to expand, the need for reliable and secure cryptocurrency exchanges has never been greater."
  • Smile ID (Vertex AI Search): "As a member of the Middle East and North Africa Financial Action Task Force (MENAFATF), which is affiliated with the state of the Financial Action Task Force (FATF), Djibouti has implemented KYC/AML regulations in line with international standards."
  • Smile ID (Vertex AI Search): "AML/KYC regulations in Djibouti are enforced by a number of regulators including the. Banque Centrale de Djibouti (BCD); Cellule de renseignement financier, Djibouti (CRF). The primary legislation governing KYC/AML in Djibouti is Dispositif De Prévention Du Blanchiment De Capitaux Et Du Financement Des Activites Terroristes' instruction No. 2017-02."
  • IMF (Vertex AI Search): "Additionally, under MENAFATF's enhanced monitoring, Djibouti is reforming its AML/CFT framework, improving the business climate, and enhancing oversight of the banking sector due to its significant offshore component and rising government exposure." (From: Djibouti: Staff Concluding Statement of the 2025 Article IV Mission, June 25, 2025)

Direct, Accessible URL Links to Sources:

Web Sources (8)

Sources discovered via web search grounding

Search queries used (5)
  • Djibouti cryptocurrency regulation status 2025
  • Central Bank of Djibouti cryptocurrency policy 2025
  • Is cryptocurrency trading legal in Djibouti for individuals 2025
  • Djibouti AML KYC cryptocurrency regulations 2025
  • Official statements Djibouti government on cryptocurrency 2025
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