Maldives
Retail_Trading_Status
- Analysis ID
- #722
- Version
- Latest
- Created
- 2025-12-12 04:50
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- 618d9bbe...
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Executive Summary
Retail cryptocurrency trading in the Maldives exists in a regulatory gray zone. While the possession and trading of cryptocurrencies by individuals are not explicitly criminalized, the Maldives Monetary Authority (MMA) strictly prohibits the use of virtual assets for domestic financial transactions and has not licensed any local exchanges. The banking sector, led by the Bank of Maldives, actively blocks payments to crypto platforms, and the Capital Market Development Authority (CMDA) is currently consulting on a draft framework to regulate 'securities' virtual assets, distinguishing them from payment tokens.
Key Pillars
Maldives Monetary Authority (MMA): Primary regulator for payments; prohibits use of crypto for legal tender or business transactions.
Capital Market Development Authority (CMDA): Regulator for securities; currently drafting a framework (S-VASP Regulation) for security tokens.
Bank of Maldives (BML): Enforces practical restrictions by blocking card/wire transactions to known crypto exchanges.
Financial Intelligence Unit (FIU): Monitors for AML/CFT risks associated with unlicensed virtual asset activities.
Landmark Laws
Maldives Monetary Act 1981 (Law No. 6/81) (Law No. 6/81) - Enacted: 1981-04-27
- The foundational act cited by the MMA to assert its sole authority over money issuance and remittance. Used as the legal basis to prohibit unauthorized virtual currency transactions and exchange businesses.
- Source
Securities Virtual Asset Service Providers Regulation (Draft) (Draft for Public Consultation)
- A proposed regulation by the CMDA (consultation open until Dec 15, 2025) to license 'Securities Virtual Asset Service Providers' (S-VASPs). It explicitly excludes payment tokens (like Bitcoin) from its scope, leaving them under MMA's restrictive purview.
- Source
Prevention of Money Laundering and Financing of Terrorism Act (Law No. 10/2014) - Enacted: 2014-04-13
- General AML/CFT framework applicable to all financial activities. While not crypto-specific, it requires reporting entities to conduct due diligence, which effectively bars them from dealing with anonymous crypto flows.
- Source
Considerations
Banking Blockade: The Bank of Maldives (BML) and other local banks routinely block transfers to international crypto exchanges, forcing users to rely on P2P markets.
Payment vs. Security Distinction: The emerging regulatory framework bifurcates assets; 'payment tokens' remain effectively banned for commerce by the MMA, while 'security tokens' may soon be regulated by the CMDA.
No Local Exchanges: There are no licensed domestic exchanges. Operating an exchange without MMA/CMDA approval is illegal.
Taxation: While there is no specific crypto tax law, capital gains are generally taxable at 15% for businesses, and potentially for individuals under broader interpretations, though enforcement is low due to the lack of reporting mechanisms.
Notes
The analysis date is December 12, 2025. The CMDA draft regulation consultation is set to close in 3 days (Dec 15, 2025), indicating a very active regulatory development phase. The distinction between 'payment' and 'security' tokens is the most critical aspect of the current Maldivian framework.
Remaining Uncertainties
- Whether the MMA will eventually align with the CMDA to create a pathway for payment tokens, or if the split regime will persist indefinitely.
- The exact timeline for the enactment of the CMDA's S-VASP regulation following the consultation period ending Dec 15, 2025.
- Whether the 'Regulatory Sandbox' mentioned in the CMDA draft will accept retail-facing exchanges or only institutional security token offerings.
Detailed Explanation
Detailed Explanation
The regulatory status for cryptocurrency in the Maldives is a Gray-Zone, characterized by an absence of explicit bans on individual ownership but significant practical and legal restrictions that severely curtail its use. The regulatory framework is bifurcated and under active development. The Maldives Monetary Authority (MMA), as the central bank, holds primary authority over payment systems and has used the Maldives Monetary Act 1981 (Law No. 6/81) to assert its sole power over money issuance. Based on this act, the MMA strictly prohibits the use of virtual currencies for domestic financial transactions, effectively banning their use as legal tender or for business payments. This restrictive stance is enforced in practice by the banking sector, most notably the Bank of Maldives (BML), which actively blocks card and wire transfers to known international cryptocurrency exchanges. Concurrently, the Capital Market Development Authority (CMDA) is developing a separate regulatory track for securities. It has issued a draft Securities Virtual Asset Service Providers Regulation for public consultation, open until December 15, 2025. This proposed framework explicitly excludes 'payment tokens' like Bitcoin, leaving them under the MMA's prohibitive regime, and instead focuses on licensing providers for security tokens. The general Prevention of Money Laundering and Financing of Terrorism Act (Law No. 10/2014) also applies, imposing AML/CFT obligations that further complicate unlicensed crypto activity. There are currently no licensed domestic cryptocurrency exchanges, and operating one without approval is illegal. While no specific crypto tax law exists, capital gains are generally taxable, though enforcement is low due to the lack of reporting mechanisms. The Financial Intelligence Unit (FIU) monitors these activities for illicit finance risks. The ongoing CMDA consultation indicates the regulatory landscape is in a critical phase of definition, with the distinction between payment and security tokens being the central dividing line for future treatment.
Summary Points
I. Regulatory Status
* Gray-Zone: Retail cryptocurrency trading is not explicitly criminalized for individuals but operates under severe restrictions and prohibitions.
* No explicit ban on individual possession or trading, but no legal framework for licensed domestic operations.
* The regulatory approach is bifurcating, with payment tokens effectively banned and security tokens under a proposed licensing regime.
II. Key Regulatory Bodies
* Maldives Monetary Authority (MMA): The central bank and primary payments regulator. Prohibits the use of virtual assets for domestic transactions and has not licensed any exchanges.
* Capital Market Development Authority (CMDA): The securities regulator. Currently consulting on a draft framework to regulate securities virtual asset service providers (S-VASPs).
* Bank of Maldives (BML): The dominant commercial bank. Enforces practical restrictions by blocking card and wire transactions to known cryptocurrency platforms.
* Financial Intelligence Unit (FIU): Monitors for AML/CFT risks associated with unlicensed virtual asset activities.
III. Important Legislation
* Maldives Monetary Act 1981 (Law No. 6/81): Enacted April 27, 1981. The foundational act cited by the MMA to assert its sole authority over money issuance and remittance. Used as the legal basis to prohibit unauthorized virtual currency transactions and exchange businesses.
* Securities Virtual Asset Service Providers Regulation (Draft): Published for public consultation, open until December 15, 2025. A proposed CMDA regulation to license S-VASPs. It explicitly excludes payment tokens (like Bitcoin) from its scope.
* Prevention of Money Laundering and Financing of Terrorism Act (Law No. 10/2014): Enacted April 13, 2014. The general AML/CFT framework applicable to all financial activities, imposing due diligence requirements that effectively bar reporting entities from dealing with anonymous crypto flows.
IV. Compliance Requirements
* For payment tokens: No formal compliance pathway exists, as their use for transactions is prohibited by the MMA.
* For security tokens (proposed): Entities would need to obtain a license as a Securities Virtual Asset Service Provider (S-VASP) from the CMDA under the draft regulation.
* All financial activities, including any potential virtual asset services, must adhere to the AML/CFT obligations under the Prevention of Money Laundering and Financing of Terrorism Act.
* While not a compliance requirement per se, capital gains from cryptocurrency are generally taxable under existing law, though enforcement is currently low.
V. Notable Restrictions or Limitations
* Banking Blockade: The Bank of Maldives and other local banks routinely block transfers to international crypto exchanges, forcing users to rely on peer-to-peer (P2P) markets.
* Prohibition on Use: The MMA prohibits the use of virtual currencies as legal tender or for business transactions within the Maldives.
* No Licensed Domestic Exchanges: Operating a cryptocurrency exchange without MMA or CMDA approval is illegal, and no such licenses have been granted.
* Regulatory Bifurcation: The emerging framework creates a critical distinction where payment tokens remain under a restrictive, prohibitive regime (MMA), while security tokens may enter a regulated, licensed space (CMDA).
VI. Recent Developments or Notes
* As of the analysis date (December 12, 2025), the CMDA's draft S-VASP Regulation is in a critical public consultation phase, set to close in 3 days (December 15, 2025). This indicates an active regulatory development phase.
* The distinction between 'payment' and 'security' tokens is the most critical aspect of the current and emerging Maldivian regulatory framework.
* The lack of licensed local exchanges and the banking blockade are the most significant practical barriers to cryptocurrency adoption and trading in the country.
Full Analysis Report
Full Analysis Report
The regulatory status of cryptocurrency in the Maldives is characterized by a strict bifurcation between 'payment' use and 'investment' potential, resulting in a 'Gray-Zone' classification. The Maldives Monetary Authority (MMA) has maintained a longstanding prohibition on the use of cryptocurrencies for financial transactions. Citing the Maldives Monetary Act 1981, the MMA asserts that it is the sole issuer of legal tender and has not authorized any party to conduct financial transactions using virtual currencies. Consequently, no local cryptocurrency exchanges are licensed to operate, and businesses are explicitly warned against accepting crypto for goods or services.
Despite the restrictive stance on payments, the possession and trading of cryptocurrencies by individuals for personal investment purposes are not explicitly criminalized in the penal code. However, practical access is severely constrained. The Bank of Maldives (BML) and other financial institutions have implemented policies to block transactions to known cryptocurrency exchanges and merchant codes. This 'bank ban' forces Maldivian residents to utilize peer-to-peer (P2P) platforms or foreign accounts to access the market, operating in a legal gray area where the activity is tolerated but structurally discouraged.
In late 2024 and throughout 2025, the Capital Market Development Authority (CMDA) began moving towards a formal regulatory framework for a specific subset of digital assets. The CMDA released a 'Securities Virtual Asset Service Providers Regulation' for public consultation (open until December 15, 2025). This draft regulation proposes a licensing regime for 'Securities Virtual Asset Service Providers' (S-VASPs) and includes provisions for a regulatory sandbox. Crucially, this draft explicitly excludes virtual assets that function purely as a means of payment (e.g., Bitcoin, stablecoins) from its scope, deferring their regulation—and continued restriction—to the MMA.
This regulatory split creates a complex environment: 'security tokens' are on a path to becoming 'Allowed-Regulated' under the CMDA, while 'payment tokens' remain in a hostile 'Gray-Zone' under the MMA. For the retail trader, this means that while they may eventually have a regulated path to invest in tokenized securities, the ability to buy, sell, or spend basic cryptocurrencies like Bitcoin remains hampered by banking restrictions and the lack of licensed domestic fiat on-ramps.
The regulatory status of cryptocurrency in the Maldives is characterized by a strict bifurcation between 'payment' use and 'investment' potential, resulting in a 'Gray-Zone' classification. The Maldives Monetary Authority (MMA) has maintained a longstanding prohibition on the use of cryptocurrencies for financial transactions. Citing the Maldives Monetary Act 1981, the MMA asserts that it is the sole issuer of legal tender and has not authorized any party to conduct financial transactions using virtual currencies. Consequently, no local cryptocurrency exchanges are licensed to operate, and businesses are explicitly warned against accepting crypto for goods or services. Despite the restrictive stance on payments, the possession and trading of cryptocurrencies by individuals for personal investment purposes are not explicitly criminalized in the penal code. However, practical access is severely constrained. The Bank of Maldives (BML) and other financial institutions have implemented policies to block transactions to known cryptocurrency exchanges and merchant codes. This 'bank ban' forces Maldivian residents to utilize peer-to-peer (P2P) platforms or foreign accounts to access the market, operating in a legal gray area where the activity is tolerated but structurally discouraged. In late 2024 and throughout 2025, the Capital Market Development Authority (CMDA) began moving towards a formal regulatory framework for a specific subset of digital assets. The CMDA released a 'Securities Virtual Asset Service Providers Regulation' for public consultation (open until December 15, 2025). This draft regulation proposes a licensing regime for 'Securities Virtual Asset Service Providers' (S-VASPs) and includes provisions for a regulatory sandbox. Crucially, this draft explicitly excludes virtual assets that function purely as a means of payment (e.g., Bitcoin, stablecoins) from its scope, deferring their regulation—and continued restriction—to the MMA. This regulatory split creates a complex environment: 'security tokens' are on a path to becoming 'Allowed-Regulated' under the CMDA, while 'payment tokens' remain in a hostile 'Gray-Zone' under the MMA. For the retail trader, this means that while they may eventually have a regulated path to invest in tokenized securities, the ability to buy, sell, or spend basic cryptocurrencies like Bitcoin remains hampered by banking restrictions and the lack of licensed domestic fiat on-ramps.
Source Evidence
Primary and secondary sources cited in this analysis
"No party has been granted permission to conduct any financial transactions using cryptocurrencies or other virtual currencies in the Maldives."
"This does not include virtual assets that function purely as means of payment, legal tender (physical and digital form), stablecoins and CBDCs."
"The MMA has made it clear that the use of cryptocurrencies... is prohibited... BML does not offer crypto exchange services."
"Cryptocurrency in the Maldives occupies a legal gray area; it is not explicitly illegal, but it is also not recognized as legal tender."
"MMA Bans Use of Virtual Currency in The Maldives."
Web Sources (4)
Sources discovered via web search grounding
Search queries used (9)
- Maldives Monetary Authority cryptocurrency regulation status
- Maldives ban on cryptocurrency trading
- Maldives crypto tax laws
- Maldives crypto trading legal status 2024 2025
- Maldives Capital Market Development Authority virtual assets
- is buying bitcoin illegal for individuals in Maldives
- Maldives CMDA regulatory sandbox virtual assets
- Maldives Capital Market Development Authority "Securities Virtual Asset Service Providers Regulation" draft date
- "Maldives Monetary Authority" cryptocurrency circular 2024 2025
https://www.lightspark.com/knowledge/is-crypto-legal-in-maldives
https://cmda.gov.mv/storage/uploads/9qavE1oy/llz3hopf.pdf
https://www.reddit.com/r/maldives/comments/v5375i/does_anyone_know_how_to_buy_bitcoincrypto_since/
https://cmda.gov.mv/en/regulations-for-public-consultation