Bosnia and Herzegovina
Retail_Trading_Status
- Analysis ID
- #613
- Version
- Latest
- Created
- 2025-12-12 03:55
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- 20c1fd15...
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Executive Summary
Retail cryptocurrency trading is legal in Bosnia and Herzegovina (BiH), with a distinct regulatory split between its two entities. The Republika Srpska (RS) has a fully operational licensing regime for Virtual Asset Service Providers (VASPs) under its Securities Commission, with active licenses issued to local exchanges. The Federation of Bosnia and Herzegovina (FBiH) currently lacks a specific crypto framework, leaving the sector largely unregulated there, though a state-level Anti-Money Laundering (AML) law enacted in February 2024 now imposes KYC/AML obligations on crypto activities across the entire country.
Key Pillars
Securities Commission of Republika Srpska (KHOV) - Primary regulator for the RS entity, maintains the VASP registry.
Financial Intelligence Department (FID) of the State Investigation and Protection Agency (SIPA) - Enforces state-level AML/CFT compliance.
State-level AML/CFT Law (2024) - Defines virtual currencies and VASPs, mandating reporting and due diligence nationwide.
Republika Srpska VASP Registry - Mandatory registration for crypto service providers operating in or from RS.
Landmark Laws
Law on the Prevention of Money Laundering and Financing of Terrorist Activities (Official Gazette of BiH, No. 13/24) - Enacted: 2024-02-16
- State-level law that explicitly defines 'virtual currencies' and 'virtual asset service providers' (VASPs). It designates VASPs as obligated entities required to conduct customer due diligence (KYC), monitor transactions, and report suspicious activities to the Financial Intelligence Department.
- Source
Law on the Securities Market (Republika Srpska) (Official Gazette of RS, No. 63/22 (Amendments)) - Enacted: 2022-09-21
- Amended to formally recognize virtual currencies and establish the Securities Commission of RS as the regulator. It created the legal basis for the VASP registry and licensing regime in the Republika Srpska entity.
- Source
Rulebook on Records of Service Providers Related to Virtual Currencies (Official Gazette of RS, Jan 2023) - Enacted: 2023-01-17
- Detailed bylaws issued by the RS Securities Commission specifying the requirements, forms, and procedures for registering as a VASP in Republika Srpska.
- Source
Considerations
Regional Regulatory Split: A fully licensed exchange exists in RS (e.g., BCX), while FBiH has no licensed local exchanges.
Banking Access: While not banned, banks are cautious; the Association of Banks of BiH notes that each bank decides its own risk appetite, leading to potential payment processing issues.
Taxation: In RS, crypto trading profits are subject to a 10% capital gains tax. In FBiH, tax authorities interpret general income tax laws to apply a 10% tax on trading profits as 'independent activity' income.
Legal Tender: The Central Bank of BiH (CBBH) emphasizes that the Convertible Mark (BAM) is the sole legal tender; crypto cannot be used for direct payments in shops.
No FBiH Licenses: Entities wishing to be fully regulated must currently incorporate and register in the Republika Srpska entity.
Notes
The regulatory status is 'Allowed-Regulated' primarily due to the robust regime in Republika Srpska and the state-wide AML law. However, observers should be aware of the internal asymmetry where one half of the country (FBiH) is significantly less developed regarding prudential crypto regulation.
Remaining Uncertainties
- Timeline for the Federation of BiH (FBiH) to adopt its own specific crypto legislation to align with RS.
- Specific reporting procedures for FBiH-based entities under the state AML law given the lack of a local FBiH regulator.
- Consistency of banking services for crypto traders across different cantons in FBiH.
Detailed Explanation
Detailed Explanation
Retail cryptocurrency trading is legal and regulated in Bosnia and Herzegovina, though the regulatory landscape is characterized by a significant internal split between the country's two main entities. The Republika Srpska (RS) entity has established a comprehensive licensing regime for Virtual Asset Service Providers (VASPs) under its Securities Commission (KHOV), which maintains an active registry and has issued licenses to local exchanges. In contrast, the Federation of Bosnia and Herzegovina (FBiH) currently lacks a specific prudential framework for crypto assets, leaving service providers there largely unregulated from a licensing perspective. However, a crucial state-level development occurred in February 2024 with the enactment of the Law on the Prevention of Money Laundering and Financing of Terrorist Activities. This law explicitly defines virtual currencies and VASPs, designating them as obligated entities across the entire country, thereby imposing mandatory Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) obligations, including customer due diligence (KYC) and suspicious transaction reporting to the Financial Intelligence Department (FID). The legal basis for the RS regime is the amended Law on the Securities Market (Official Gazette of RS, No. 63/22), enacted in September 2022, which empowered the RS Securities Commission to regulate virtual currencies. This was followed by the detailed Rulebook on Records of Service Providers Related to Virtual Currencies in January 2023, which outlines registration procedures. Consequently, a business seeking full regulatory oversight must currently incorporate and obtain a license in the Republika Srpska entity. Important restrictions include the Central Bank of Bosnia and Herzegovina's affirmation that the Convertible Mark (BAM) is the sole legal tender, prohibiting the use of crypto for direct payments. Furthermore, while not formally banned, banking access for crypto businesses can be challenging as individual banks assess their own risk appetite, potentially leading to payment processing issues. Taxation also differs by entity: RS applies a 10% capital gains tax on trading profits, while FBiH tax authorities interpret general income laws to impose a 10% tax on such profits as income from independent activity.
Summary Points
I. Regulatory Status
* Retail cryptocurrency trading is legal and regulated in Bosnia and Herzegovina.
* Status is Allowed-Regulated, primarily due to the robust regime in Republika Srpska and the state-wide AML law.
* There is a distinct regulatory split between the country's two entities:
* Republika Srpska (RS): Has a fully operational VASP licensing regime.
* Federation of Bosnia and Herzegovina (FBiH): Lacks a specific crypto framework, leaving the sector largely unregulated for prudential purposes.
II. Key Regulatory Bodies
* Securities Commission of Republika Srpska (KHOV): Primary regulator for the RS entity; maintains the VASP registry and oversees licensing.
* Financial Intelligence Department (FID) of the State Investigation and Protection Agency (SIPA): Enforces state-level AML/CFT compliance for VASPs across the entire country.
* Central Bank of Bosnia and Herzegovina (CBBH): Emphasizes that the Convertible Mark (BAM) is the sole legal tender.
III. Important Legislation
* Law on the Prevention of Money Laundering and Financing of Terrorist Activities (Official Gazette of BiH, No. 13/24, enacted 2024-02-16):
* State-level law that explicitly defines 'virtual currencies' and 'virtual asset service providers (VASPs)'.
* Designates VASPs as obligated entities required to conduct KYC, monitor transactions, and report suspicious activities.
* Law on the Securities Market (Republika Srpska) (Official Gazette of RS, No. 63/22, amendments enacted 2022-09-21):
* Amended to formally recognize virtual currencies and establish the RS Securities Commission as the regulator.
* Created the legal basis for the VASP registry and licensing regime in RS.
* Rulebook on Records of Service Providers Related to Virtual Currencies (Official Gazette of RS, enacted 2023-01-17):
* Detailed bylaws issued by the RS Securities Commission specifying requirements, forms, and procedures for VASP registration.
IV. Compliance Requirements
* In Republika Srpska: Mandatory registration and licensing as a VASP with the RS Securities Commission.
* Nationwide (under 2024 AML Law): All VASPs must conduct customer due diligence (KYC), monitor transactions, and report suspicious activities to the FID.
* Taxation:
* RS: Crypto trading profits subject to a 10% capital gains tax.
* FBiH: Tax authorities apply a 10% tax on trading profits as income from 'independent activity' under general income tax laws.
V. Notable Restrictions or Limitations
* Legal Tender: The CBBH states the Convertible Mark (BAM) is the sole legal tender; crypto cannot be used for direct payments in shops.
* Banking Access: While not banned, banks are cautious; each bank decides its own risk appetite, leading to potential payment processing issues for crypto businesses.
* Regulatory Asymmetry: Entities wishing to be fully regulated must currently incorporate and register in the Republika Srpska entity, as FBiH lacks a licensing framework.
VI. Recent Developments or Notes
* The enactment of the state-level AML law in February 2024 is a significant development, imposing uniform AML/CFT obligations across both entities.
* Observers should be aware of the internal asymmetry where one half of the country (FBiH) is significantly less developed regarding prudential crypto regulation compared to RS.
* A fully licensed exchange (e.g., BCX) operates in RS, while there are no licensed local exchanges in FBiH.
Full Analysis Report
Full Analysis Report
Bosnia and Herzegovina presents a unique 'two-speed' regulatory environment for cryptocurrency due to its complex political structure. The country is divided into two main entities: the Republika Srpska (RS) and the Federation of Bosnia and Herzegovina (FBiH). As of late 2025, the Republika Srpska has established a comprehensive regulatory framework, earning the country an 'Allowed-Regulated' status overall, despite the Federation's lag. In RS, the Law on the Securities Market was amended in 2022 to bring virtual assets under the supervision of the Securities Commission of Republika Srpska (KHOV). This was followed by the creation of a public registry for Virtual Asset Service Providers (VASPs). Several entities, most notably 'Digital Asset Management d.o.o.' (operating the BCX platform), have successfully obtained licenses and operate legally with banking support.
In contrast, the Federation of Bosnia and Herzegovina (FBiH) has not yet passed specific cryptocurrency legislation. Consequently, there is no mechanism for companies to obtain a crypto-specific license in FBiH. Retail traders in FBiH are not prohibited from trading, but they lack the consumer protections afforded by the RS regime and often rely on RS-based or international platforms. The Tax Administration of FBiH has issued clarifications stating that trading profits are taxable under existing personal income tax laws (10%), treating crypto trading as an independent professional activity.
A significant unifying development occurred in February 2024 with the adoption of the new state-level 'Law on the Prevention of Money Laundering and Financing of Terrorist Activities'. This law applies to the entire territory of Bosnia and Herzegovina and explicitly defines virtual currencies and VASPs in alignment with FATF standards. It mandates that all crypto service providers, regardless of their entity location, must implement AML/CFT measures, conduct KYC, and report to the state Financial Intelligence Department. This law effectively bridges the regulatory gap for financial crimes, even if prudential supervision remains split.
The Central Bank of Bosnia and Herzegovina (CBBH) maintains a conservative stance, repeatedly warning citizens that cryptocurrency is not legal tender and is not guaranteed by the state. However, the CBBH has not issued a ban on trading or holding assets. Banking access remains a practical hurdle; while RS-licensed entities have secured banking relationships, individual traders in FBiH may face sporadic transaction blocks depending on their bank's internal risk policies.
Bosnia and Herzegovina presents a unique 'two-speed' regulatory environment for cryptocurrency due to its complex political structure. The country is divided into two main entities: the Republika Srpska (RS) and the Federation of Bosnia and Herzegovina (FBiH). As of late 2025, the Republika Srpska has established a comprehensive regulatory framework, earning the country an 'Allowed-Regulated' status overall, despite the Federation's lag. In RS, the Law on the Securities Market was amended in 2022 to bring virtual assets under the supervision of the Securities Commission of Republika Srpska (KHOV). This was followed by the creation of a public registry for Virtual Asset Service Providers (VASPs). Several entities, most notably 'Digital Asset Management d.o.o.' (operating the BCX platform), have successfully obtained licenses and operate legally with banking support. In contrast, the Federation of Bosnia and Herzegovina (FBiH) has not yet passed specific cryptocurrency legislation. Consequently, there is no mechanism for companies to obtain a crypto-specific license in FBiH. Retail traders in FBiH are not prohibited from trading, but they lack the consumer protections afforded by the RS regime and often rely on RS-based or international platforms. The Tax Administration of FBiH has issued clarifications stating that trading profits are taxable under existing personal income tax laws (10%), treating crypto trading as an independent professional activity. A significant unifying development occurred in February 2024 with the adoption of the new state-level 'Law on the Prevention of Money Laundering and Financing of Terrorist Activities'. This law applies to the entire territory of Bosnia and Herzegovina and explicitly defines virtual currencies and VASPs in alignment with FATF standards. It mandates that all crypto service providers, regardless of their entity location, must implement AML/CFT measures, conduct KYC, and report to the state Financial Intelligence Department. This law effectively bridges the regulatory gap for financial crimes, even if prudential supervision remains split. The Central Bank of Bosnia and Herzegovina (CBBH) maintains a conservative stance, repeatedly warning citizens that cryptocurrency is not legal tender and is not guaranteed by the state. However, the CBBH has not issued a ban on trading or holding assets. Banking access remains a practical hurdle; while RS-licensed entities have secured banking relationships, individual traders in FBiH may face sporadic transaction blocks depending on their bank's internal risk policies.
Source Evidence
Primary and secondary sources cited in this analysis
"Virtual currencies are a digital record of value... Providers of services related to virtual currencies are obligated entities."
"List of registered providers: Digital Asset Management d.o.o. Banja Luka..."
"The Convertible Mark is the only legal means of payment... CBBH warns citizens of the risks associated with investing in virtual currencies."
"Virtual currency services are licensed only in RS... In RS, virtual assets were formally recognized in 2023."
"BCX platform registered as the first provider of services related to virtual currencies with the Securities Commission of the RS."
Web Sources (12)
Sources discovered via web search grounding
Search queries used (6)
- Bosnia and Herzegovina crypto regulation state level AML law
- crypto tax Bosnia and Herzegovina
- Securities Commission of Republika Srpska virtual currency register
- Central Bank of Bosnia and Herzegovina cryptocurrency warning 2024
- Federation of Bosnia and Herzegovina cryptocurrency law 2024 2025
- Republika Srpska Law on Virtual Currencies status 2024 2025
https://coinfomania.com/cryptocurrency-regulation-in-bosnia-and-herzegovina/
https://sb-sb.com/services/crypto/crypto-license/europe/crypto-license-in-bosnia-and-herzegovina/
https://gofaizen-sherle.com/crypto-license/bosnia-and-herzegovina
https://capital.ba/why-fbih-still-hasnt-legally-recognized-cryptocurrencies/
https://cms.law/en/int/expert-guides/cms-expert-guide-to-crypto-regulation/bosnia-and-herzegovina
https://freemanlaw.com/cryptocurrency/bosnia-and-herzegovina-and-cryptocurrency/
https://manimama.eu/cryptolicense/cryptolicense-in-bosnia-and-herzegovina-a-gateway-to-digital-innovation/
https://rue.ee/blog/crypto-license-in-bosnia-and-herzegovina-mica-alternative/
https://bcx.ba/en/component/content/article/18-english/bcx-news/131-bcx-platform-registered-as-the-first-provider-of-services-related-to-virtual-currencies-with-the-securities-commission-of-the-rs
https://bcx.ba/bcx-biblioteka/routedownload/certificate-securities-commission
https://spin-portal.info/a-money-laundering-paradise-why-fbih-still-hasnt-legally-recognized-cryptocurrencies/
https://ideas.repec.org/a/dug/jaccma/y2025i1p7-23.html